BY SACHIN KUMAR
DOHA: Gold prices in Qatar yesterday fell to five-year low, triggering huge rush by customers for the yellow metal.
Prices of one gramme of 24-carat gold plunged to QR137, down 35 percent compared with the peak days in October 2011 when prices were around QR210.
For the past one month 24-carat gold had been trading at QR143-QR145 and yesterday one gramme was trading at QR128 in the local market.
“There is a huge rush for gold because of falling prices. We have not seen 24-carat gold trading at this level (QR137) in the past five years,” Joseph M P, Sales Manager, Sky Jewellery, told The Peninsula.
“Most customers are expatriates, with Indian and Egyptian buyers dominating the scene. Demand is high for jewellery,” he added.
Gold prices in Qatar are falling, taking cues from international market. Yesterday, an ounce of gold in international market plunged to $1,080 — the lowest level since February 2010.
“A few days after Ramadan and Eid Al Fitr are usually dull in terms of gold buying because customers buy most of it during the holy month.
“The recent fall in gold prices has changed the trend and again brought customers back to jewellery shops,” said Biju Ramachandran, Regional Manager, Atlas, a gold jewellery chain with three retail outlets in Qatar and 60 in the Middle East and India.
“Demand for gold is highly price-sensitive in Qatar. Whenever prices fall, demand for jewellery goes up sharply. Similarly, demand goes down when prices rise,” he added.
After touching peak in the second half of 2011, prices of 24-carat gold in Qatar showed some sign of moderation and oscillated between QR180 and QR200 until September 2012. But prices rose to QR210 in October 2012, then started declining and the trend continues. Last year, prices were around QR160-QR150.
“The decline in gold prices provides good opportunity for customers like me. I am buying gold jewellery for my daughter. It is better to buy jewellery now because I know gold prices will move up in the coming years.
“For me, gold is a long-term investment,” said an expatriate woman waiting for her turn to buy jewellery at Malabar Gold and Diamond showroom at Lulu Hypermarket on D-Ring Road.
The recent price fall is driven largely by the strengthening of the US dollar on the expectation of interest rate hike by US central bank in the coming months.
Any increase in US interest rates will strengthen the dollar, prompting more fund outflows from gold and other commodities to the dollar. Another reason for the slide in prices was data released by China last week that showed Beijing has been buying less gold than analysts had forecast. China is the world’s biggest consumer of gold and any slowdown in its demand affects the prices.
The Peninsula
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