Sharp fall in the price of gold has created high demand for the yellow metal, said The Peninsula. Gold prices have fallen around 31 percent since their peak in 2011. A gramme of 24-carat gold is currently trading at around QR148, significantly lower from its peak days in October 2011 when it was around QR210.
“Demand of gold bars has gone up significantly due to fall in the prices. We were selling around two to three kilogrammes of gold bars every day in 2011-12. Now we are selling around eight to 10 kilogram of gold bars per day,” said a senior official of major bullion house. “The demand is strong from both segments — Qataris and expatriates,” he added. After touching peak in the second half of 2011, the price of 24-carat gold showed some sign of moderation and oscillated between QR180 and QR200 in until September 2012. It went up to QR210 again in October 2012 but started declining trend which is still continuing.
Prices of gold in Qatar are linked to international market, mainly the London bullion market. After enjoying bull-run till 2012, gold prices have started falling since mainly driven expectation of recovery in US economy. US economy has started showing signs of revival which is likely to prompt its central bank to raise interest rate. The prospects of rising interest rate and strengthen of US dollar has dented the demand for gold. Instead of buying gold, global investors started investing in US bonds and dollar.
“Gold sale is highly price-sensitive and people keep track of its prices on a daily basis. Whenever gold prices head down, people rush to buy jewellery,” said Dileep Madhavan, Regional Manager, Atlas — a gold jewellery chain that has three retail outlets in Qatar and 60 in the Middle East and India. “In the last two years, sales of jewellery has gone up around 30-40 percent,” he said. The demand of gold jewellery is higher during festival seasons while demand of gold bar is higher when prices head lower. According to the jewelers, major 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.
Price of the yellow metal is further expected to fall, say experts. US economy is expected to grow which is likely to sap investors’ demand for protective assets such as gold. A brighter outlook tends to spur demand for investments like stocks and bonds that benefit from an expanding economy. Jewellers expect higher sales in coming days due to lower prices.