Malaysia's gold jewellery exports to hit RM5.2bil

GEORGE TOWN - The value of gold jewellery exported from Malaysia this year is likely to rise by about 13 per cent to hit RM5.2bil (S$2bil), compared with RM4.63bil a year ago.

Penang Goldsmith Association (PGA) adviser Joeson Khor told StarBiz that this was due to the softening of gold prices to about US$1,240 (S$1,557) per ounce from around US$1,400 per ounce in June 2013. This has contributed to the increase in overseas sales.

From January to August 2013, the value of jewellery exported amounted to RM3.7bil, compared with RM3.1bil in the same period a year ago, according to a Malaysia External Trade Development Corp (Matrade) report. The top buyers included UAE, Hong Kong and India.

For the eight-month period, UAE bought RM3.45bil worth of gold jewellery from Malaysia compared with RM2.8bil in the same period of 2012. Hong Kong and India purchased RM132mil and RM16mil of gold jewellery respectively from January to August this year, compared with RM126mil and RM9mil in the same period last year.

However, there was a slight drop in the domestic sales of gold jewellery, despite the plunge in gold prices, due to softening purchasing power, according to Khor.

"This is due probably to competition from imported gold jewellery from countries like the UK, the United States and India."

According to the Matrade report, from January to August, Malaysia imported RM619mil worth of gold jewellery, compared with RM529mil in the same period last year. On the price of gold, Khor said it was likely to drop below US$1,200 per ounce by the end of the year.

"We should see some pick up in February next year," Khor said.

He said according to Barrick Gold Corp, the world's largest gold miner, the current cost of gold production is around US$900 to US$975 per ounce. "If gold prices fall below US$1,200 per ounce, it will be very close to the production cost level," he said.