Gold shops hoping to ramp up sales before Ramadan

Gold prices in Batha’s commercial district in the Kingdom’s capital are currently down, but salesmen believe that sales would increase in the run-up to the holy month of Ramadan.
“This is the time for gold customers to buy because of the low prices,” one of them told Arab News yesterday. At present, the cost of a 22-carat gold ranges from SR 165 to SR 160 and SR 155 per gram. They said that gold jewelry becomes more expensive if it has an intricate design. They also said that the prices these days are very unstable. “If it’s SR 160 per gram today, it could be either SR 160 or SR 162 tomorrow,” Yusuf Balatif, 35, salesman at Ballatif Jewellers, told Arab News. He said that the current prices are lower compared to last month when it cost SR 200 per gram.
He added that there’s not much that could be done regarding prices “since these are dictated by market forces outside the Kingdom, such as Europe or the United States.”
Customers used to giving gold jewelry as gifts to their loved ones expressed hope that the cost of gold further go down.
“I hope that the cost per gram will go down so that I could shop for my better half and daughters who are now in college,” said a Filipino working for a local bank.
He noted that five years ago, the cost of gold jewelry hovered between SR 110 to SR 115 per gram. Many claimed in the mid-1980s, per gram cost only SR 45.
He added, however, that despite the low prices, only a few customers show up at their shop compared to the past. “We’re lucky if we could make a total sale of SR5,000 a day,” he said.
However, he said that “customers might just be waiting for prices to go down further, just like what happened in April when the prices for the yellow metal crashed, sparking off a gold rush across the Kingdom.”
Saleh Mohammed, a salesman at Warood Al-Wadee Jewels, added that all gold shops in Batha are experiencing a dull season. His shop averages only SR 6,000 daily sales.
“We have been competing with the other shops by taking a minimum profit from clients who have become our regular customers,” he said. He added that aside from the rapport that “we have established with our customers and our reputation for lower prices compared to the others, we manage to remain a competitive player in the market.”
He added that many take fancy to gold “even if billionaire Warren Buffet has dismissed gold as a valueless asset and that it has no inherent value.”
“Customers like gold even if it doesn’t generate earnings and its price is volatile. They consider it as a hedge against inflation,” he said.
He added that while customers visit the gold shops near the parking area behind the five tall buildings along King Abdulaziz Road, also known as Old Airport Road, many more visit the gold souk in Old Batha area.
“Many go there because there are more shops where they could haggle for lower prices. But the prices here and at the Old Batha area are just the same,” he said.