Despite soaring prices of gold, gold business is booming in Saudi Arabia. This was attributed mainly to Saudis seeing gold as a safe haven. The overall quantitative stimulus offered in the US economy is another factor that resulted in gold prices going up in both the global and local markets, according to market sources.
Normally, there is a big demand for gold and jewelry during Ramadan every year. The sales activity would further increase in the last days of Ramadan before Eid Al-Fitr. Gold traders are keen to display a variety of new models and designs of ornaments during this season of the year.
Many customers complain that traders exploit the huge demand for the yellow metal by taking a big margin of profit, especially for ornaments. They cite the big margin in prices of gold before and after manufacturing ornaments as an example, Al-Madinah newspaper reported.
Ali Saleh Baterfi, a senior gold trader in Jeddah, sees further increase in prices of gold in coming months. He expects the price of gold per ounce to rise from the current $ 1,613 to $ 1,750 in the third quarter and to $ 1,950 by the end of the year.
At present, there is an increased awareness among gold consumers about the market situation. The highly advanced means of the media and the Internet have contributed substantially to this development. “They are eager to follow up prices of gold in the global market on a daily basis. Most of the customers want to purchase gold bullion in order to stock them as the safest means of investment,” he said, adding that an increasing number of citizens turn out to make investments in gold instead of investing in stocks and mutual funds.
Abdul Rahman Al-Shahrani, a government employee, said that doubling prices of gold and metals over the past few years has forced him to buy a limited quantity of gold. “I can’t afford buying a huge quantity of gold ornaments because of the soaring prices. My income allows me to buy a reasonable quantity of the yellow metal for personal use of women in the family as well as to present as gifts to relatives on special occasions,” he said.
Saeed Al-Ghamdi, another citizen, said that he buys jewelry in the early days of Ramadan to avoid the rush and further hike in prices in the last days of the holy month. On her part, Umm Saleh, a housewife, said that traders are increasing prices of gold, especially precious stones and lobes, exorbitantly after cashing in on the huge demand.