How low gold prices affect jewelry sales
- Declining gold prices boosts jewelry sales
Low gold prices have boosted sales in Saudi markets despite recent global fluctuations in its value. Riyadh and Makkah registered the highest levels of sales in this regard, followed by the Eastern Province and Madinah.
The price of the yellow metal has registered continuous decline in world markets throughout recent weeks. While the value of gold may have increased by one percent during the Christmas week, much of these gains were countered by the lack of cash for gold available within the market in the post-Christmas period. As such, the value of gold is now declining for the sixth consecutive week, making this the biggest period of decline since the 1970s.
The price drops in gold increased buying among the Gulf countries, especially in the UAE and Saudi Arabia. Saudi jewelers commented that during the first ten days of this year, there were more buyers of gold than was initially expected, thus exceeding expectations.
Jeweler Ali Zakaria said that such price drops encourage buying despite the fact that no one knows what price the gold is going to reach at its lowest point. This may mean that their gold will be worth a considerable amount of money, leading many to buy gold in the hope that the price will increase again, enabling them to make money through reselling.
He added that the gold markets in the Kingdom are booming now because of new models that jewelers are introducing as part of the New Year drive in addition to the lower prices.
Mohammad Ali, a former member of the Gold Committee in the Eastern Province Chamber of Trade and Industry, said that the price of gold jewelry in Saudi Arabia is lower than that of other countries such as Jordan and Egypt. He added that the purchasing power differs from one country to another in the Gulf with the prime distinction being the type of gold that is bought.
“Gold jewelers are having better sales with increased buying, more so in Jeddah and Riyadh because the ‘valued manufacturing price’ per piece goes down by a half,” said Ali, adding that in the last ten days he has sold more gold products than silver and diamonds.
Source: Arab News – Declining gold prices boosts jewelry sales
