Gold has never been more expensive, more sought after, or more consequential for global finance. In January 2026, prices breached $5,500 per ounce for the first time in history—an astonishing 67% surge over 2025 alone. The rally, driven by central bank accumulation, ETF inflows, and safe-haven demand amid escalating geopolitical tensions, has reshaped the global commodities landscape. For Bangladesh, where gold holds deep cultural significance yet enters the country through channels that exist largely outside formal markets, the implications are profound: record domestic prices, declining jewelry sales, and a smuggling economy that thrives precisely because legitimate supply chains remain inaccessible.

This is the story of how a precious metal’s unprecedented rise ripples through global supply chains—and why Bangladesh finds itself increasingly disconnected from the infrastructure that moves gold around the world.

The Historic Rally: What’s Driving Gold to Record Highs

The numbers are staggering. According to the World Gold Council’s latest Gold Demand Trends report, global gold demand exceeded 5,000 tonnes for the first time in 2025, reaching a record 5,002 tonnes. Combined with the price surge—the LBMA PM gold price set 53 new all-time highs during the year—total demand value reached an unprecedented $555 billion, up 45% year-over-year. The average Q4 2025 price of $4,135 per ounce represented a 55% increase from the same period in 2024.

Three forces converged to create this historic rally. First, investment demand exploded. Global gold ETF holdings grew by 801 tonnes in 2025—the second-strongest year on record—while bar and coin buying accelerated to a 12-year high. Overall investment demand soared 84% to a record 2,175 tonnes. US-listed gold ETFs alone attracted $50 billion in inflows and 437 tonnes of demand, pushing holdings to a record 2,019 tonnes ($280 billion in assets under management). Retailers described the environment as “COVID-esque,” marked by overwhelming order volumes and heightened customer anxiety.

Second, central banks continued accumulating at historically elevated rates. Official sector purchases reached 863 tonnes in 2025—below the 1,000+ tonne mark of the three preceding years but still far above the pre-2022 average of 400-500 tonnes. Central banks’ share of total demand rose to nearly 25%, compared with 12% in 2015-19. The National Bank of Poland emerged as the largest buyer for the second consecutive year, adding 102 tonnes and lifting its gold reserves to 550 tonnes (28% of total reserves), with the governor signaling intentions to increase holdings to 700 tonnes citing national security considerations.

Third, geopolitical uncertainty provided persistent tailwinds. From US-China trade tensions and tariff volatility to conflicts in the Middle East and Eastern Europe, gold’s appeal as a safe-haven asset intensified. Goldman Sachs noted that hedges against global macro and policy risks have become “sticky,” effectively lifting the starting point for gold prices. The investment bank raised its December 2026 forecast to $5,400 per ounce, with some analysts projecting $6,000 or higher longer term.

The Global Supply Chain: How Gold Moves Around the World

Understanding Bangladesh’s gold market requires first understanding how gold moves globally. Total gold supply rose 1% in 2025 to match demand at approximately 5,000 tonnes—the highest level in the World Gold Council’s annual data series dating back to 1970. Mine production reached a new record of 3,672 tonnes, while recycling contributed 1,404 tonnes (up a modest 3% despite the 67% price surge).

The supply chain begins with mining operations dominated by a handful of major producers. Newmont, Barrick Gold, Agnico Eagle, AngloGold Ashanti, and Gold Fields control significant portions of global output, operating across North America, South America, Australia, Africa, and increasingly Central Asia. These companies have invested heavily in ESG frameworks, blockchain-enabled traceability, and AI-powered operational optimization. The global gold mining market is projected to exceed $250 billion by value.

From mines, gold flows through a network of refiners—primarily concentrated in Switzerland (home to four of the world’s largest refineries processing roughly 70% of the world’s gold), the United Arab Emirates, India, and increasingly China. The London Bullion Market Association (LBMA) and Responsible Minerals Initiative (RMI) have advanced digital due diligence frameworks to combat unethical sourcing, with blockchain traceability increasingly deployed to verify responsibly sourced gold.

Refined gold then enters distribution channels: central bank vaults, commodity exchanges (COMEX, Shanghai Gold Exchange, LBMA), ETF custodians, jewelry manufacturers, and industrial users. Markets like Dubai, Singapore, and Hong Kong serve as major trading hubs, while commodity exchanges in India—the world’s second-largest gold consumer after China—facilitate price discovery for the South Asian region.

Bangladesh’s Disconnected Market

Bangladesh exists almost entirely outside this formal infrastructure. The country has no domestic gold mining, no commodity exchange for trading gold, no operational refining facilities, and virtually no commercial imports through banking channels. The gold policy introduced in 2018 and Bangladesh Bank licenses granted to 19 institutions in 2019 for commercial gold import have produced negligible results—five or six importers attempted to use the system before abandoning it due to tax burdens approaching 18-19% and processing times of 24-25 days.

As a result, the Bangladesh Jewellers Association (BAJUS) acknowledges that almost all gold enters the country informally, much of it through smuggling. Some gold arrives legally through returning expatriates—passengers can bring 10 bhori (117 grams) by paying Tk 4,000 per bhori in customs duty—but traders admit this represents only a fraction of supply. Annual demand is estimated at 20-40 tonnes, though no reliable statistics exist. Only about 10% of demand is met through recycled jewelry.

The consequences for consumers are stark. As of early February 2026, 22-carat gold in Bangladesh costs approximately Tk 245,760 per bhori (11.664 grams)—more than 10% higher than prices in India or Dubai for equivalent purity. At the end of 2024, the price stood at Tk 140,586 per bhori; by October 2025 it had crossed Tk 216,332—representing near-doubling in under two years. When buyers add the mandatory 5% VAT and minimum Tk 3,500 per bhori making charges, the total cost rises further still.

The Smuggling Economy and Its Paradoxes

Rising global prices have created a paradox: domestic consumption has fallen even as smuggling activity has intensified. BAJUS reports that jewelry sales have declined significantly—some estimates suggest a 30% drop mirroring trends in India—as the middle and lower-income buyers who traditionally purchased gold for weddings and family wealth accumulation find themselves priced out of the market.

Yet demand among smugglers has surged. Bangladesh has emerged as a key route in regional gold smuggling networks, with gold flowing both into and out of the country. The Border Guard Bangladesh (BGB) and Customs Intelligence and Investigation Department recovered 143 kg of illegal gold worth over Tk 1.96 billion in just seven months from August 2024 to February 2025—and this represents only a fraction of actual flows.

Masudur Rahman, chairman of the BAJUS Price Determination Committee, explains the dynamic bluntly: “Everyone is buying gold because they believe the dollar will fall. That’s why prices are rising by the day. When the international rate goes up, we must follow, otherwise gold will simply leave the country.”

Why Bangladesh Pays More: Structural Barriers

Several structural factors explain why Bangladeshi consumers pay premiums over international rates. First, the absence of a commodity exchange means no transparent price discovery mechanism exists—BAJUS effectively sets prices through its Standing Committee on Pricing and Price Monitoring, adding what the association claims is only 2.8% profit margin but what economists suggest includes significant middleman markups.

Second, wastage rates in jewelry manufacturing are exceptionally high. Bangladesh’s 12% wastage rate far exceeds the global range of 1-6%, adding costs that are passed on to consumers. Third, the country’s foreign exchange constraints—though easing with record remittance inflows—have pressured the government to restrict luxury imports including gold, pushing more supply through unofficial channels that command higher prices.

Policy Options and the Path Forward

BAJUS has proposed several reforms in pre-budget discussions with the National Board of Revenue: reducing VAT on gold and silver jewelry sales from 5% to 2%, exempting VAT when purchasing from licensed dealers, establishing one-stop service centers at airports for gold importers, and offering 10-year tax holidays for establishing gold refining factories. The association also advocates for stricter baggage rules to combat smuggling while simultaneously easing procedures for commercial import.

Economists suggest more fundamental changes are needed. A functioning secondary debt market and commodity exchange would enable transparent price discovery. Gold-backed bonds or digital gold investment products could channel demand into regulated instruments. Proper coordination between the finance ministry, commerce ministry, and central bank could create an import framework that actually functions—rather than the current system where licenses exist but remain unusable.

The global gold market in 2026 shows no signs of cooling. J.P. Morgan projects prices could reach $5,000 per ounce by Q4 2026, with $6,000 possible longer term. Central bank demand is expected to remain elevated at around 850 tonnes annually. ETF inflows and bar and coin demand will likely stay robust amid persistent geopolitical uncertainty. For Bangladesh, this means continued upward pressure on domestic prices—unless structural reforms can finally connect the country to the global supply chain that currently bypasses it entirely.

Gold has always occupied a special place in Bangladeshi culture—a store of intergenerational wealth, a wedding necessity, a hedge against economic uncertainty. As global prices reach heights that seemed impossible just two years ago, that cultural connection is being tested. The precious metal that once served families of all income levels risks becoming a luxury accessible only to the wealthy. The irony is that Bangladesh’s disconnection from formal gold supply chains—originally a product of policy inattention and foreign exchange constraints—now costs consumers billions annually in premium pricing while generating zero tax revenue for the state and enriching smuggling networks instead.

The global gold rush of 2025-26 has laid bare a market structure that was always dysfunctional but is now becoming untenable. Whether Bangladesh’s policymakers seize this moment to build proper infrastructure—or simply watch as gold becomes ever more expensive and ever less accessible—will determine whether the country’s relationship with humanity’s oldest store of value evolves or ossifies.