Gold demand low despite price fall

There are hardly any takers for gold or its jewellery in the local market even though their prices remain low for almost a month now.

Bullion traders and gold jewellers say they don’t know the reason for dampened demand, but the fact remains that the market is dull, particularly after Eid Al Adha.

Gold prices have been moving within the band of QR 3,823.57 and QR 4,005.65 per ounce (28.3495 grammes) for the past few weeks, traders said.

Yesterday, for example, the rates ranged between QR 127.5 and QR 133 for a gramme of pure, or 24-carat gold, and the prices for 22, 21 and 18-carats were lower.

The standard 116-gramme pure gold bar, which is also known as 10-tola bar and popular mostly among South Asian expatriates, was available for QR 14,870.

“But there isn’t much of demand even though gold prices have come down in the past three to four weeks,” said an official from Gulf Exchange, which also deals in bullion, particularly 24 and 22-carat gold coins of various denominations.

“There was demand earlier but the market is so dull now,” the official added.

“We have small-time expatriate buyers coming to us these days—those who are going home on long vacations and would carry small coins.”

The rush for gold jewellery, according to Gulf Exchange official, had thinned after Eid Al Adha.

Nasir Aslam, from Al Badiya Jewellers in the Gold Souq, while maintaining that the demand was dampened, cited a few reasons for gold losing its luster.

India and China are not buying the yellow metal anymore, which is affecting the global gold demand, and India imposing customs duty on gold import, said Aslam.

Aslam said that Indian expatriates in Qatar are not carrying gold back home in quantities they used to do earlier, he said.

This is a major dampener of the local retail bullion and jewellery markets, said Aslam.

With their sizeable population, Indians in Qatar have been the largest buyer of gold bullion and jewellery.

“I would say that 70 percent of the local demand came from Indian expatriates,” he said.

But due to the customs duty on gold in India, the demand is severely affected.

“This is one of the major reasons of the local gold bullion and jewellery markets not doing so well as they were before,” said Aslam.

Bullion traders said the situation is not  peculiar to Qatar.  In Dubai, which is a major bullion centre, and other Gulf cities the situation is almost the same, a trader said.

Asked if the gold market would look up soon, Aslam said the prices and the demand would remain the same for some time to come. “I don’t think the market would look up soon,” he said. [The Peninsula]