Sunday 23 January 2022

Falling gold sales... Arab Spring upshot

Makkah gold sales down over Arab Spring woes

MAKKAH, October 2, 2014

Saudi Arabia's retail gold merchants used to look forward to brisk sales during the annual hajj pilgrimage to Makkah but lingering economic hardships since the Arab Spring have left shops eerily empty this year, retailers said.

Traditionally, Arab visitors to the Muslim holy city generated the bulk of jewellery sales during the hajj period, buying necklaces, rings and bracelets as gifts to take home.

But jewellery shops just outside the Grand Mosque, Islam's holiest site, were almost completely empty on Thursday, a day before the official start of the pilgrimage on Friday.

Salesman sipped tea and read newspapers behind their counters, but there were few customers to be seen.

"This hajj season is even worse than last year," said Abu Ali al-Sawaj, sales manager at Thabit Gold and Jewelry, a shop outside the Grand Mosque. "I would say sales are down around 20 percent, you see how empty the shop is it never used to be like this," he added.

Gold retailers say that their main customers had long been Egyptians and Syrians, but the Arab Spring has changed that, with Asian customers starting to overtake Arab buyers.

"You would never expect to see the nationalities who are buyers now," said Mohamed Abdel-Latif, salesman at Al-Saygh Jewelry. "I used to think that Afghanistan and Bangladesh were poor countries but they are the ones buying (gold) these days," he added.

Abdel-Latif said Asian customers tended to want smaller items costing less and shops were looking to cater to their demand.

"Its not about sales value anymore, its about volume, these new customers want small items with a low price and that's what we've started producing," he told Reuters.

Gold, often seen as an alternative investment during times of uncertainty, edged up 0.6 percent to $1,220.55 per ounce on Thursday. The metal gained 0.4 percent on Wednesday after falling earlier towards a nine-month low.

In Makkah's Grand Mosque gold market, retailers said prices of 21-carat metal stood at SR155 ($42.4) per gram, almost on par with last year's price of SR160 ($42.6).

Some retailers have lost hope of a full recovery in sales anytime soon and have considered switching their business.

"I miss the feeling of selling goods to people, you know that exchange of goods with cash, I've been a trader all my life and now I don't feel like one," said Walid Saleh, a Yemeni salesman at one of the Grade Mosque gold stores.

"People don't have money now and like to buy cheap things, I might go work for a silver shop next year, the golden days are over my friend." – Reuters

Tags: Makkah | grand mosque | gold sales | Arab Spring |

calendarCalendar of Events