People rush to sell gold in Bahrain
Manama, April 21, 2011
Jewellery traders in Bahrain have reported a rush of people trying to sell gold, after the precious metal reached an all-time high.
However, some shops are turning people away because they have no money to spend after two months of unrest significantly harmed business.
The price of gold reached record levels of almost BD18 per gm yesterday, compared to BD11 in March last year and BD7.500 in March 2009.
'We are seeing a lot of people making a beeline for gold traders in the hope they can sell off their old gold in exchange for cash,' Bahrain Chamber of Commerce and Industry (BCCI) Gold and Pearl Jewellery Committee head Mohammed Sajid Shaikh told our sister newspaper Gulf Daily News (GDN).
'Traders would buy if business was good, but since we have been suffering for the last nearly two months and have no customers, we have no liquid cash.'
He said this meant there was little if any gold movement in the market.
'The whole trade depends on buying, selling and making,' he said.
'Now that the rates are very high, coupled with the loss in business, we (traders) have been taking a beating from all sides.'
Gold rose to more than $1,500 an ounce yesterday in the international market for the first time ever largely due to worries over the US dollar, as well as rising inflation and increased consumer spending in Asia.
Prices are up five per cent this month alone with gold's appeal as a safe investment boosted by talk of Greece restructuring its debt and Standard & Poor's threat to downgrade America's triple-A credit rating.
'Gold has been acting as a currency in its own right, and that is why we are up at $1,500,' said Simon Weeks, head of precious metals at the Bank of Nova Scotia, told Reuters. 'There is an awful lot of bad news in the price. The S&P comment the other day has given us the final kicker to get up here.'
Shaikh said gold and jewellery traders were now planning to seek help from the BCCI, after it emerged some landlords were increasing rents in the Manama suq - where business came to a standstill as a result of political turmoil since mid-February.
However, he said others had recognised the plight of traders in the traditional shopping district.
'While many of the landlords have announced a one to two months moratorium on rents, others have even said they would forego the rent for a few months,' said Shaikh.
'In this scenario, we are surprised some landlords, knowing fully well trade is suffering overall, have decided to increase rents.
'They should be contributing towards the revival of the economy and not putting an additional burden on us.'
He revealed gold and jewellery traders would bring their grievances to BCCI chairman Dr Esam Fakhro and other board members during a meeting next week.
Their woes have been compounded by a decision not to renew permits for workshops in the suq.-TradeArabia News Service