21 May 2013
Muscat: Many gold shops on Ruwi High Street have no gold bars for sale after prices plunged below OMR16.5 today, sparking a buying frenzy, noted a group of jewellers on Monday.
Confirming this, Jose K. F., regional manager of Joyalukkas, said some shops were facing a shortage in gold bars because of the high demand. "However, we have managed to obtain three kilograms of gold in different denominations from Turkey via Dubai; it is expected to last for another 4 or 5 days," he told Times of Oman.
Relatively upbeat over the increase in footfall resulting from tumbling gold prices, a group of jewellers here say an element of speculation has driven many to pre-pone their purchases. "The footfall has increased substantially, and everybody is asking for gold bars for the purpose of investment. Now, tell me, where will we get these gold bars? Even in Dubai, there is a shortage in gold bars since demand in Turkey and other places has gone up," stated another jeweller on Ruwi High Street.
Although these purchases were spurred by the fall in the price of gold, an element of speculation is also apparent. Most of the customers making a beeline for jewellery shops would have eventually purchased gold anyway, perhaps for a wedding or other auspicious occasion, three or four months from now.
After reaching unprecedented highs of OMR22.9 per gram for 22-karat gold in September 2011, gold rates came down to OMR16.5 on Monday, marking a drop of some 28 per cent.
Jose also pointed out that the decline in prices has resulted in a sharp rise in the number of customers entering the store over the last few days.
"Sales have gone up by 30 per cent, compared with last year. Taking advantage of the situation, people are buying gold in a hurry," Jose explained. On whether the rates would dip further, jewellers said, "It is difficult to predict since the market is volatile. But business-wise, it may not make a difference since demand will drop once the prices go up."
Although some of the lanes on Ruwi High Street were packed with parked cars, long queues were noticed at nearby jewellers over the last few days.
"The rush has been heavy ever since gold prices started falling. Although increasing sales will help our cause, the customer will get his or her share of gold at a lower price," remarked Suraj, another jeweller on Ruwi High Street.
The scene was not markedly different at jewellery stores in hypermarkets. "Footfall has increased fourfold over the past few days. I attribute this to the rate cuts," one of the jewellers stated.
Small jewellers are a little circumspect about this "rare trend" since they believe the price dip will eat into their profit margins. "We have been involved in this trade for quite a while. This is a trend that has not been seen for years. The 28-per cent fall in price will mean a loss with regard to the cost of creating the jewellery," one of them said.
As for the "wedding shoppers," many are laughing all the way to the jewellery shop. "I am elated about the price dip. It has come at the right time since my sister is getting married this winter. We purchased some bangles today and are planning on buying the main sets this week," confirmed Mohammad, a resident of Al Hail.
From October 2008 onwards, gold prices started climbing, and on July 11, 2011, 22-karat gold was priced at OMR18.4 per gram.
Since then, the price has gradually climbed from OMR19.1 on July 19 to OMR22.9 -- the highest it has ever been-- in the first week of September 2011. The 22-karat gold rate on Monday was OMR16.6 per gram. Twenty-one-karat gold is priced at OMR15.5, whereas 18-karat gold is available for OMR14.5 per gram.
Muscat: Many gold shops on Ruwi High Street have no gold bars for sale after prices plunged below OMR16.5 today, sparking a buying frenzy, noted a group of jewellers on Monday.
Confirming this, Jose K. F., regional manager of Joyalukkas, said some shops were facing a shortage in gold bars because of the high demand. "However, we have managed to obtain three kilograms of gold in different denominations from Turkey via Dubai; it is expected to last for another 4 or 5 days," he told Times of Oman.
Relatively upbeat over the increase in footfall resulting from tumbling gold prices, a group of jewellers here say an element of speculation has driven many to pre-pone their purchases. "The footfall has increased substantially, and everybody is asking for gold bars for the purpose of investment. Now, tell me, where will we get these gold bars? Even in Dubai, there is a shortage in gold bars since demand in Turkey and other places has gone up," stated another jeweller on Ruwi High Street.
Although these purchases were spurred by the fall in the price of gold, an element of speculation is also apparent. Most of the customers making a beeline for jewellery shops would have eventually purchased gold anyway, perhaps for a wedding or other auspicious occasion, three or four months from now.
After reaching unprecedented highs of OMR22.9 per gram for 22-karat gold in September 2011, gold rates came down to OMR16.5 on Monday, marking a drop of some 28 per cent.
Jose also pointed out that the decline in prices has resulted in a sharp rise in the number of customers entering the store over the last few days.
"Sales have gone up by 30 per cent, compared with last year. Taking advantage of the situation, people are buying gold in a hurry," Jose explained. On whether the rates would dip further, jewellers said, "It is difficult to predict since the market is volatile. But business-wise, it may not make a difference since demand will drop once the prices go up."
Although some of the lanes on Ruwi High Street were packed with parked cars, long queues were noticed at nearby jewellers over the last few days.
"The rush has been heavy ever since gold prices started falling. Although increasing sales will help our cause, the customer will get his or her share of gold at a lower price," remarked Suraj, another jeweller on Ruwi High Street.
The scene was not markedly different at jewellery stores in hypermarkets. "Footfall has increased fourfold over the past few days. I attribute this to the rate cuts," one of the jewellers stated.
Small jewellers are a little circumspect about this "rare trend" since they believe the price dip will eat into their profit margins. "We have been involved in this trade for quite a while. This is a trend that has not been seen for years. The 28-per cent fall in price will mean a loss with regard to the cost of creating the jewellery," one of them said.
As for the "wedding shoppers," many are laughing all the way to the jewellery shop. "I am elated about the price dip. It has come at the right time since my sister is getting married this winter. We purchased some bangles today and are planning on buying the main sets this week," confirmed Mohammad, a resident of Al Hail.
From October 2008 onwards, gold prices started climbing, and on July 11, 2011, 22-karat gold was priced at OMR18.4 per gram.
Since then, the price has gradually climbed from OMR19.1 on July 19 to OMR22.9 -- the highest it has ever been-- in the first week of September 2011. The 22-karat gold rate on Monday was OMR16.6 per gram. Twenty-one-karat gold is priced at OMR15.5, whereas 18-karat gold is available for OMR14.5 per gram.
© Times of Oman 2013
