DOHA: People are rushing to buy jewellery as gold prices continued to decline yesterday.
A gramme of 24 carat gold was trading at QR148.5 in Doha yesterday, compared to QR154 a month back. Similarly, the prices of one gramme of 22 carat gold declined to QR139.5 from QR145 last month.
Gold bars of 116.64 gramme of 24 carat were available at QR17,321 compared to around QR18,000 a month back.
“Our sales are up by around 30 percent this month. It is not a festive season, the trigger for higher sales is the lower gold prices. Customers rush to buy jewellery whenever gold prices decline because the sale of gold is price-sensitive,” said Dileep Madhavan, Regional Manager, Atlas, a gold jewellery chain.
The prices have been falling since 2012. After touching peak in the second half of 2011, the prices of 24 carat gold showed some moderation and hovered in the range of QR180-QR200 until September 2012. They reached QR210 in October 2012 but have been declining since then.
Gold prices in Qatar are linked to global market, mainly the London bullion market. After a bull-run until 2012, the prices started falling, mainly driven by expectations of recovery in the US economy. The US economy has started showing signs of revival and may prompt its central bank to raise interest rates. Such a scenario, coupled with the strengthening of the dollar have dented demand for gold as global investors have started investing in US bonds and dollar.
“Demand is also strong from investors for gold bars for investment, anticipating an increase in the prices in coming months,” said a senior official of a bullion house.
Demand for gold jewellery is higher during festival seasons and for gold bars when prices drop. High demand for gold jewellery in Qatar is seen around Eid Al Fitr, Ramadan and during some Indian festivals such as Diwali, Onam and Akhsay Tritya.
Gold prices are likely to drop further, experts said, adding the US economy is expected to grow and sap investors’ demand for protective assets such as gold. A brighter outlook tends to spur demand for investments in stocks and bonds that benefit from an expanding economy. Jewellers expect higher sales in coming days due to lower gold prices.
The Peninsula
