Apr 05 2009 |
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Slowdown hits Mideast gold sales in first quarter
DUBAI - Dubai, the biggest bullion market for trading gold in the Middle East, has been hit hard by high prices of the yellow metal. Dubai and other leading cities in the Gulf countries have reported crash in gold sales up to 60 percent for January, February and March in 2009.It is not just Dubai, the City of Gold, that has seen bullion markets reeling under recession. Plunging gold sales, volatility in prices and economic meltdown have forced several leading gold and diamond jewelers across Middle East cities to halt all their expansion plans.
"High gold prices and extreme volatility in prices are affecting us very hard these days," said Joy Alukkas, chairman of Joyalukkas Group , a leading India-based gold and diamond retail chain with 40 major outlets across the world.
He said the March 2009 earnings of Joyalukkas Group has fallen by 22 percent. "Gold jewelry business is suffering under price fluctuations and sales of gold have drastically across cities in the Gulf countries," he told Commodity Online.
He said gold sales will begin to rise in the Gulf countries once prices of the yellow metal stabilize.In the last three months, gold prices have been ranging between $800 and $1,000 a kilogram.
The Joyalukkas Group estimates that gold sales in cities in UAE like Dubai and Bahrain and Qatar have plunged by at least 60% in the last three months of 2009. The jewelry chain that has been opening 12 outlet launches a year since its inception in 1998 has halted all its expansion plans for the next one year."We want to consolidate in the next one year. We have committed to five store openings in the UAE, Bahrain, Qatar and India. We will not launch any more stores until this crisis is over."
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Comments By Our Users (1)
Far more important for the outlook for gold prices will be whether GCC leaders decide to include gold in the new single currency unit's basket. Russia and China are calling for a greater role for gold in currency, perhaps the GCC will follow, see:
http://arabianmoney.net/2009/04/07/gcc-could-include-gold-in-its-single-currency/
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