BY MOHAMMAD SHOEB
DOHA: Gold might have lost its glitter for investors as a ‘store of value’, but demand for gold jewellery in the local market is expected to remain stable despite volatile prices of gold, say experts.
“Demand for gold (jewellery and bullion) for investment may not be that strong, but the business in Qatar was not affected much due to volatile prices of gold in the international market,” said Managing Director of Al Sulaiman Jewellery and Watches, Azim Abbas.
In an interview with The Peninsula, Abbas said that those who have liking for jewellery will continue to buy irrespective of the prices. “Investors are smart and intelligent… Since banks (in India) are offering attractive rates of interest, people do not see gold as an investment opportunity,” he said.
Analysts say the future of gold market will continue to remain volatile. Two months ago it witnessed a sharp decline and now it’s recovering gradually, so it’s not wise to invest in gold at the current price levels.
Prices in the international market remained flat yesterday after a late rally erased initial losses and gold ended the week with a marginal recovery. Spot gold last traded down $0.02 percent at $1,334.80 an ounce.
“Few months ago we predicted gold prices will go up to $2,000 per ounce, but unfortunately we were proved wrong. Now again there are speculations that gold will recover, but given market trends, I am not very sure about the prices getting stabilised very soon. “Our business was not affected due the market volatility. Those who have to buy for marriages and other occasions, they are doing.”
Al Sulaiman Jewellery has 25 retail shops in Qatar — 15 deal in gold jewellery and the remaining are involved in diamond trading.
“Gold is our traditional business, but our main focus now is on diamond trading as Qataris have more liking for diamond. They do not wait for the wedding season to buy jewellery only for the bride; they buy for all members of the family throughout the year,” said Abbas.
The situation in the jewellery market has changed in favour of diamond. Today’s office-going younger generation prefer diamond jewellery they wear on daily basis instead of heavy gold items.
About challenges in diamond business, Abbas said: “Design of diamond jewellery change very fast. We have to be very specific and careful while ordering as Qatari customers are very conscious about the international scenario.” Qatar’s gold market largely remains dependent on the income of the expat community, mainly Asians. According to traders, 2011 and 2012 were difficult relatively as there were less economic activities in the country.
Anticipating the future of gold market, Abbas said that here economic activities largely depend on public spending unlike Dubai… The year 2013 witnessed some recovery, and 2014 is expected to remain stable, but the market will start crawling only after 2015 once work on mega projects commences in full swing.”
He said that gold is no longer a luxury item for people, and it is also not serving investment purposes. “Earlier people used to buy gold much in advance for marriages with a hope that prices will appreciate, but now the situation has changed significantly,” he said.
The Peninsula
