Twenty-one carat gold was selling at Tk 12,600 while 22 carat at Tk 13,200 a bhori only a week ago.

Bangladesh Jewellers Association (BJA) on Wednesday re-fixed the price, which is all-time high in domestic market.

Sharp price spiral of the precious metal in the international market is the main reason for such price hike in the domestic market, local jewellers said.

They said as some big international investors consider gold an alternative investment to US dollars, gold is soaring in international market.

In October this year, the price of guinea or 21 carat gold was Tk 11,800 while 22 carat gold was Tk 12,360.

Local jewellers said gold prices in the local market always follow the international market price. If the price of gold in the international market increases further, the price in the local market will also surge, they added.

The gold price was only US$ 230 per ounce (2 bhori and 10.5 ana) in early 2001 but just after the September 11 attack on the US it started soaring. In April 2002, the price rose to $312 an ounce in international market.

"The price now hovers between $510 and $520 in the international market," Anwar Hossain, president of Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA), said.

However, in the international markets on Wednesday, the price hit a 24-year high at $534 per ounce in Hong Kong and $511 per ounce in New York.

Hossain, also a BJA executive member, said big investors and clients in the major economies used to stock dollars in banks and also in the big securities. But faced with prolonged unstable political situation in international arena, the investors now prefer to stock gold instead of dollar, pushing gold prices up, Hossain, also proprietor of General Jwellers, explained.

The BJMEA chief, however, said total demand for gold in the domestic market decreased to 30 tons in 2005 from 50 tons in 2001, thanks to high prices.

According to BJMEA statistics, gold prices in the domestic market shot up by around Tk 7,000 a bhori in the last five years.

Bangladeshi jewellers usually source gold from Saudi Arabia, UAE, and Qatar.