Gold prices dropped by Tk 1,749 per bhori after hitting a record high on November 29 as the cost of pure gold declined in local markets.

Effective tomorrow, each bhori (11.664 grams) of 22-carat gold will cost Tk 108,125, down from Tk 109,874 earlier.

The Bangladesh Jewellers Association (Bajus) took the decision in a meeting today, citing the decrease in pure gold prices, according to a statement from the association.

Gold prices hit a new milestone on November 29, when Bajus set the price per bhori of gold at more than Tk 1.09 lakh, with prices having crossed the Tk 1 lakh-mark in July for the first time.

Even though Bangladesh does not import a significant quantity of gold, the prices are almost always linked with international fluctuations, along with domestic market volatility.

With an annual demand of 20 to 40 tonnes, 80 percent of the country's demand for gold is met through smuggling.

In August last year, the central bank made it mandatory to keep a 100 percent margin on letters of credit for gold with a view to discouraging imports and save foreign currency.

The country's foreign currency reserve has declined by about 25 percent in the past 18 months.