DOHA: There is a rush for gold in the local market as prices have tumbled seven percent over the past three days.
Since Saturday, the rate of 22-carat gold has, for instance, come down to QR160 from QR174 per gram.
It is the same with pure gold bought mostly by expatiates as a form of investment. Its price was QR172 per gram yesterday.
There is a scramble for 24 and 22-carat gold coins and bars for investment, as well as for jewellery which is mostly made of 22 and 18-carat gold. Eighteen carat gold was being sold for QR132
a gram.
The standard 116-gram bar which was selling for QR21,500 until last Saturday, was available for up to QR19,300 yesterday. “We expect the prices to plummet further,” a bullion
trader said.
Imagine that the bar was priced at a high of up to QR26,000 in September 2011, that is, less than two years ago, he said.
The trader from a famous exchange house, said not wanting him or his company to be named, said they had run out of stock yesterday due to frenzied demand for gold coins and bars and would be replenishing stocks today.
“We are getting large stocks of gold coins and bars from London, Switzerland and Dubai due to the buying spree,” said the trader. “The demand is really huge. People are becoming mad.”
A salesman at a jewellery store, Damas, said there had been a “big boost in sales” since gold prices started sliding. He said there was such a rush in his shop last evening that he didn’t even have the time to drink water.
Asked about Qatari buyers, the bullion trader said they mostly preferred jewellery for their women and were not much into buying gold for investment. He said gold prices were expected to go further down.
According to bullion traders, what has been driving a downward trend in gold prices internationally is that shark investors, who were relying en masse on the yellow metal as a haven during the global financial crisis, are returning to paper assets, particularly in the US.
“This is changing the investment scenario worldwide. Gold is losing its lustre for institutional investors in the west,” said
the trader.
About rumours that offloading of gold reserves by Cyprus, which was facing a huge debt crisis with its banking industry on the brink of collapse, had led to the downward spiral in prices, analysts said Cypriots had barely sold 10 tonnes of gold — a volume not expected to make much difference in the global gold trade.
“I think we are in for a low gold price regime over the long-term,” said an analyst requesting anonymity.
The Peninsula
