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| 19 February, 2018

Oman's gold market bucks global trend

The nation’s demand for gold jewellery fell by merely 1 per cent

A salesperson arranges 24K gold bracelets for Chinese weddings at Chow Tai Fook Jewellery store in Hong Kong, China December 14, 2017.

A salesperson arranges 24K gold bracelets for Chinese weddings at Chow Tai Fook Jewellery store in Hong Kong, China December 14, 2017.

REUTERS/Tyrone Siu

Muscat: Demand for gold continued in the Sultanate last year, even as the global demand for the yellow metal fell.

The nation’s demand for gold jewellery fell by merely 1 per cent, while there was a turmoil in the market across the world, including in the Middle East, according to a World Gold Council (WGC) spokesperson.

“The demand stood at 4.70 tonnes in 2016, as against 4.65 tonnes in 2017. Even though the demand for gold was unexpectedly low last year, it didn’t make much of a difference to our average sales,” Anto Ignatious, Regional Manager at Joyalukkas, said. “The market remains stable without any alarming dip in sales,” he added.

“Despite the change in demand for gold all over the world, we managed to keep the sales going as no drop in demand was seen here,” an official from the Malabar Gold and Diamonds said.

“The fluctuation in gold prices is less likely to make a difference as quality and designs in Oman are truly irresistible,” said an Indian expat.

“But sometimes, you are bound to give it a second thought. Last year, the prices rose a bit high and we had to wait until they went down as I had a wedding to attend in Sohar. But nothing changed in two weeks and I just had to agree with the quoted price,” she added.

The demand for gold fell by 7 per cent year on year to just over 4,000 tonnes in 2017, an eight-year low, according to a report from the WGC.

Gold averaged at $1,257.2 an ounce over the year, down by 1 per cent from 2016.

While gold prices rose last year on the back of the dollar’s weakness, rising interest rates and a surge in stock markets detracted from the metal’s appeal as an investment.

Rising interest rates

“Certainly, the higher equities and rising interest rates would have prompted some investors to think about their allocation to gold (last year),” WGC’s head of market intelligence Alistair Hewitt said.

“That said, a lot of investors are concerned about frothy asset prices,” he added.

With the monetary policy still loose in Europe, 73 per cent of new gold ETF investments last year flowed into European funds, he said.

“In Europe, you still had negative interest rates and negative yields. You can contrast that with the United States, where you had three rate hikes,” Hewitt said.

“As I don’t understand how the stock market operates, I usually buy gold as an investment. The best part about buying gold is that it also adds to your jewellery collection. You are basically paying once, while driving benefits for eternity,” Fouzia Khanuum, a resident, said.

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