21 June 2006
Gold business in Bahrain has dropped by 40 per cent due to unprecedented 41 per cent hike in the price of the yellow metal since January this year.
The rise in gold prices has hit jewellery businesses hard in retail and wholesale and other categories because about 20 per cent of the gold market has dried up due to this adverse market trend, according to Dr Ahmed Jassim Tahoo, the BCCI board member and the Chairman of the Gold Committee at Bahrain Chamber of Commerce and Industry. He claimed that businesses were closing down due to the lack of sales. He said: "The situation in the gold business is critical.
"Businessmen who had nine shops now have only three branches, with the other six closed now. One Bahraini businessman has closed four of his shops.
"The reason for so many businessmen withdrawing their money from the gold market and selling their business is because of the extreme increase in the yellow metal prices. Even the wholesale and retail businesses have been affected and overall there is a 40 per cent decrease in the gold business.
He continued: "All these people, who are withdrawing their money from the gold market, are now investing in the stock market and real estate businesses. People have stopped buying gold and a lot of women are selling old gold to get more money, taking advantage of the high price. Gold is not a necessity like food; it is a luxury so people prefer having more money than gold."
He added: "The prices of gold will change and go down but not dramatically. The forecast is that for the next two to four years gold prices are not going to go down much. It will fluctuate on a daily basis between five to 10 per cent but will not drop like few years back. "Around eight to ten years ago the 21 carat gold price was BD2 per gram. We wish to have an average rate of gold prices which is BD5 for 22 carat gold or BD4.8 for 21 carat gold. If the price is more than this rate then that means it is on the high side."
Gold business in Bahrain has dropped by 40 per cent due to unprecedented 41 per cent hike in the price of the yellow metal since January this year.
The rise in gold prices has hit jewellery businesses hard in retail and wholesale and other categories because about 20 per cent of the gold market has dried up due to this adverse market trend, according to Dr Ahmed Jassim Tahoo, the BCCI board member and the Chairman of the Gold Committee at Bahrain Chamber of Commerce and Industry. He claimed that businesses were closing down due to the lack of sales. He said: "The situation in the gold business is critical.
"Businessmen who had nine shops now have only three branches, with the other six closed now. One Bahraini businessman has closed four of his shops.
"The reason for so many businessmen withdrawing their money from the gold market and selling their business is because of the extreme increase in the yellow metal prices. Even the wholesale and retail businesses have been affected and overall there is a 40 per cent decrease in the gold business.
He continued: "All these people, who are withdrawing their money from the gold market, are now investing in the stock market and real estate businesses. People have stopped buying gold and a lot of women are selling old gold to get more money, taking advantage of the high price. Gold is not a necessity like food; it is a luxury so people prefer having more money than gold."
He added: "The prices of gold will change and go down but not dramatically. The forecast is that for the next two to four years gold prices are not going to go down much. It will fluctuate on a daily basis between five to 10 per cent but will not drop like few years back. "Around eight to ten years ago the 21 carat gold price was BD2 per gram. We wish to have an average rate of gold prices which is BD5 for 22 carat gold or BD4.8 for 21 carat gold. If the price is more than this rate then that means it is on the high side."
By Naila Barakat Business Reporter
© Bahrain Tribune 2006
