Gold sales seen rising despite higher prices

GOLD prices have again started moving up after remaining stable for a few days. Yesterday 24-carat gold closed at QR79.50 a gram in the local market. Twentytwo-carat gold closed at QR73.50 a gram while for 10 tolas (116gm) the price was QR8,950 yesterday.

Industry sources said despite the rising prices the gold sales had been brisk. A jeweller said he saw good business prospects in the coming days as customers were getting ready for the Valentine’s Day on February 14.

A V Joju, assistant manager at Joy Alukkas Jewellery, said already there were orders for occasion-specific diamonds from customers.

”Invariably, we see brisk gold sales as well in the days preceding the Valentine’s Day,” he said.
With Dubai Shopping Festival (DSF) concluding in the next few days, he said, gold supply from the emirate, the main regional source for the yellow metal, would be restored.

Joju also said the shortage of gold coins in the local market had ended with enough supplies coming in from Dubai.

Gold coins were not available in most Doha outlets till last week primarily due to their heavy demand in Dubai. The spurt in the demand of gold in Dubai was due to the DSF during which jewellers had offered special incentives and prizes to customers.

”Many see gold as a safe haven for investment. And many customers think the gold prices are unlikely to fall, though they may not shoot up in the short to medium-term. Hence it is being considered a reasonably good investment,” a jewellery shop manager said.

Sources said the business seen since mid-November was sort of ”unprecedented”. Gold sales had gone up because of 15th Asian Games in Doha. Both visitors and residents seem to have contributed to this.

Some jewellers said many visitors to the Games and athletes purchased gold during their shopping. Expatriates who flew out on holidays taking advantage of schools closure during the Games had also purchased gold.

And towards the year-end, the gold sales have triggered primarily because of Christmas, Eid al-Adha and the New Year, Joju said.

Many believe gold prices may not remain stable in the coming weeks due to the current fluctuation in the crude oil price.

The price of oil has a bearing on the gold price in the international market. So, the price of yellow metal will depend on how the crude price moves.

In the last two years, gold prices in the international market have more than doubled; causing a sharp decline in the metal’s retail business. This was due to a combination of factors including skirmishes in many regions, declining bank interest rates and bearish run in capital markets worldwide.

Source: www.gulf-times.com