RIYADH: Demand for ornamental gold has soared by over 200 percent, coinciding with the end of summer and Eid holidays, also considered a popular time for weddings.
The price of a gram has broken through the SR135 for the first time in more than 18 months. Gold market sources added that as a result many women are tempted to sell their gold.
Najwa Muhammad, a housewife, said she sold gold that she originally bought at SR80 a gram for SR115, a profit of SR35 each gram. “I have made a SR5,000 profit from the small quantity of the gold I sold,” she said.
Member of the Gold and Jewelry Committee at the Riyadh Chamber of Commerce and Industry Hussain Al-Khalifa, who is also an owner of a gold shop, said the many weddings that took place in summer increased the demand for gold tremendously. “Some buyers were obliged to purchase gold despite its high prices because they had to give it out as gifts on various social occasions including weddings,” he added.
Al-Khalifa added the intense international speculation in gold, the drop in the price of the dollar and rise in oil prices were all factors that led to the unprecedented hike in gold prices.
Gold shop owner Faisal Al-Qahtani claimed the price of gold was affected by international factors, prompting businessmen and countries to convert about a third of their wealth into gold to ensure the safety of their funds in case of war when currency tended to lose its value. He cited the first Gulf war when the value of the Kuwaiti dinar plummeted from SR13 to SR5.
Al-Qahtani recalled businessmen in North America and Southeast Asia gave up trading in shares to invest in gold “because they were certain that its price was stable and would not drop in the near future.” He said a weak dollar and the economic ventures of the US had prompted them to speculate in gold, revealing that a number of businessmen from the Gulf region had recently bought large quantities. Al-Qahtani, however, believed some consumers were reluctant to buy gold these days because they were hoping that the prices would come down during the third quarter of December.
“The drop in real estate investments was another reason why investors were now more inclined to trade in gold,” he added. He said visitors and Haj and Umrah pilgrims accounted for much of the demand in the western region of the Kingdom.
He added the central region occupies second place in the purchases of gold followed by the southern region, while demand was much less in the eastern region.
