Demand for gold would hinge on dollar movements in the coming months.

By Pratap John/Chief Business Reporter

 

Local jewellers saw brisk business last month as traditional Eid sales coupled with lower prices encouraged many people to buy gold.

Improving economic climate, particularly in the US, put downward pressure on the yellow metal, which closed at $1,286.9 / troy ounce (31.1gm) yesterday.

In the local market, gold closed at QR148.50 / gram for 22-carat and QR158.50 for 24-carat while ten tolas (116gm) ended trading at QR18,487 (retail selling price) yesterday.

“Eid festivities and lower gold price have attracted many customers. Promotion coinciding with the festivities was another incentive for customers,” said AJ Joju, regional manager at Joyalukkas Jewellery in Doha.

Gold price stood at QR138.50 per gram (22-carat) and QR148.50 (24-carat) early this year. Ten tolas were priced at QR17,320 on January 1, an industry source said yesterday.

Analysts’ believe demand for gold would hinge on dollar movements in the coming months.

“Generally, a drop in demand for the yellow metal is seen whenever the dollar strengthens. Saving currency, which fetched more in exchange value, might then become a better option for discerning investors,” an analyst said.

Many Gulf currencies including Qatari riyal are pegged to the dollar.

Another factor that may impact gold trade will be “consumer sentiment”.

“Consumer sentiment improves with economic climate. When economic climate becomes uncertain, many consumers either build on their savings or hold off on purchases,” the analyst said.

In the local market, greater demand is seen more for finished jewellery such as necklace than gold bars or coins.

“This is due to the import restrictions on gold in many countries including India,” Joju points out.  Local jewellers source gold from many places including Dubai and Singapore.

Gold is often seen as a “haven investment” in times of geopolitical uncertainty. The global situation has clearly become uncertain now due to crises in Gaza and Ukraine.

A few years ago, people bought gold on a need-to basis, for weddings or special occasions when they really have to.

Local jewellers expect gold demand to continue this month as well as in October during Eid al-Adha.

Generally, demand also soars during Diwali, which is celebrated in many countries this year on October 23, a festival during which gold is given as precious gift to friends and relatives.

 

 

 

 

 

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