Gold glitters despite high prices

Local jewellers are seeing good sales despite high gold prices mainly due to the geopolitical situation and a weakening dollar.
Gold rose for a third straight day on Friday with the yellow metal trading at QR171.50 per gm for 24-carat, QR159.50 /gm (22-carat) and QR19,465 (116gm - tola bar) in the local market.
Inquiries reveal there is a growing demand for gold bars - from 1gm to 116gm, with the bullion remaining a ‘safe haven’ for many discerning investors.
“While there are a lot of buyers for finished jewellery, there is clearly a renewed interest in gold coins and bars,” said A J Joju, manager of the Joyalukkas Jewellery in Doha.
“We cannot report any fall in demand because of the rising bullion prices. On the contrary, we see new customers every day,” Joju said.
However, Muzammil Hanif, senior vice-president at Alfardan Exchange, said he would not relate the growing demand to the current geopolitical situation.
“I don’t think the surge in demand for gold bars and coins now has anything to do with the regional tension. The bullion sparks demand always, though the greatest demand is for smaller bars,” Hanif said.
Gold price has shot up considerably in the last few months, aided by rising global demand mainly from consumers in China and India and governments in various countries.
A Reuter’s report said the current surge in gold prices is mainly due to the failure of the unilateral ceasefire declared by Libyan leader Muammar Gaddafi, which could not calm investor nerves as political tensions remain elevated across the region.
Joju said another reason for the recent increase in gold demand was the Hindu spring festival of Holi.
Hindus in many countries including India, Nepal, Sri Lanka, Suriname, Malaysia, Guyana, South Africa, Trinidad, the United Kingdom, the United States, Mauritius and Fiji celebrate Holi today.
Local jewellers said they met the ‘extra bullion demand’ with supplies from Dubai, the region’s largest gold market.
Traditionally, gold sales become brisk from mid-June until the first week of August, which industry sources term as the “peak summer season.”
Doha-based jewellers source gold mostly from Dubai and get fresh stocks from the emirate every fortnight.
Although there is no sharp difference in gold price between markets, the Gulf region is still considered a preferred shopping place because of the ‘guarantee on quality,’ Joju said.
According to the Reuters report, bullion has also benefited from a ‘weaker dollar’ as traders braced for more official auction after the G7 countries co-ordinated to intervene on the Japanese yen and as fresh political unrest was reported in Yemen and Syria among other places.

(Source: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=423084&version=1&template_id=36&parent_id=16)