DAMMAM: The rise in the price of gold over the past two years on international markets has forced about 25 percent of traders to shift to real estate businesses. The current price of gold is $1,366 per ounce. Gold merchants in the Eastern Province said the increasing price of gold over the last few months has resulted in reduced trade. This, and the fact that there is greater activity in the real estate market, has seen merchants move away from gold trading. Abdullatif Annaser, a gold trader, said some traders have turned completely to the real estate business, selling all of their gold stock and buying land and buildings. Others shifted partially, he said, adding that the shift can be felt clearly in some areas in Dammam. On shops that are still open despite the high prices and the low demand, Annaser said many are optimistic that during the mid-term and summer holidays the situation will get better, because in those periods the region usually witnesses a “wave of weddings” which would “stir up the deteriorating situation”. Ali Addjani, another gold merchant, described the situation in the gold market as “quiet and not encouraging”. “The hikes in gold prices have created a negative atmosphere in the sector in general”. He added that most sales are of light pieces like rings, earrings and small sets. “Large gold sets are not moved from their places in the show windows because the prices are high,” he said, adding prices range between SR170 and SR185 per gram. Addjani said the “disaster” for traders is in the challenge of having the liquidity required to meet financial obligations including salaries and rents. An official from the Gold Committee at the Eastern Province chamber said international gold price hike is a result of the slow recovery of the global economy and the eurozone's sovereign debt crisis. This is in addition to the “modest performance of international bourses over the last 10 years, the US dollar weakening against major currencies, and the strong belief in gold as an insurance policy for wealth.”
