Jan 03 2012
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Soaring gold prices drive investors to other markets
"The owner of the shop has reduced the number of workers here from five to three and is investing in constructing new apartment buildings, which unlike gold, sell very quickly," said Fahad.
According to another shopkeeper, silver is now in high demand as it is more affordable. Khamis, who until recently worked in a gold shop, said his sponsor sold all of his gold stock and now exclusively deals with silver. One gram of silver can sell between SR113 to SR125 depending on the quality and craftsmanship.
Abdul Hamid Ali, a shopkeeper in the Al-Balad area of downtown Jeddah famous for its gold shops, said despite high prices people were coming to buy gold. "Spring break is approaching and people are interested in gold again thanks to the slight decrease in prices."
Talking about investment in gold, Farsi said that in 2006, 66 percent of gold was used in jewelry, 14 percent in industry and 12 for investment. In 2009, this percentage changed leaving only 50 percent in use for jewelry, 11 percent for industry and 20 percent for investments.
Investors in the Kingdom's gold market recently agreed to reduce the exchange of used gold to combat counterfeit gold, which has been blamed for contributing to the fluctuation of prices.
The agreement obliges gold shops not to buy gold from individuals unless it has been tested.
There are 6,000 gold shops in the Kingdom, 250 small production factories and 700 small repair factories.
© Arab News 2012
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