Dubai Debt Crisis Crimps Regional Retail Gold Buying
Source: Mineweb, Amena Bakr (12/18/09)
". . .people don't think that this is the right time to buy gold since the price is so high."
"Sales have remained at the same level of last year as the prices are very high and people in Dubai are now more afraid of losing their jobs, so spending has been cut down," said Vincent George, sales manager at Chittilappillu Jewellers at the Dubai old gold souk.
"Things have really slowed down over the past month as people don't think that this is the right time to buy gold since the price is so high," said Muhand al Awadi, salesman at Al Ansari Jewellery.
"And since many people work in the banking and real estate sector now, there's an added fear of being laid off after this debt announcement," he added.
Jewellery sales in Dubai, which promotes itself as the city of gold, have seen sharp declines in sales volumes since the end of 2008, as economic crisis shrank consumers' disposable incomes and limited the number of tourists visiting the emirate.
Sales during the first six months of this year dropped as much as 40% from last year's levels, retailers told Reuters, adding that current sale volumes had improved but still remained at a low level.
Retailers and traders are hoping to see gold prices ease by the beginning of the year, which would boost demand.
Spot gold was around $1,127.60 per ounce, down 1% from New York's notional close of $1,137.80.
It hit a one-month low of $1,109.10 last week, and has now been trading about 8% below a record high of $1,226.10 hit on Dec. 3.