International lenders did not disclose specificities, but said it was part of global cost-cutting plansNovember 26, 2015 11:32
Saudi retail gold demand up during haj -trade
Number of pilgrims expected to rise to 3 mln this year.
November 15, 2010 4:09 by Reuters
The annual Muslim pilgrimage to Mecca is lifting demand for gold jewellery in Saudi Arabia, but business is still sluggish due to high prices, gold retailers said on Monday.
“Haj is the main season. After that, the business will be weak,” said Ali al-Asadi, a gold salesman in Mecca.
He said customers bought on average 80 or 100 grams compared with 200 previously, before gold prices went up.
Spot gold was bid at $1,365.95 an ounce on Monday, against $1,366.35 late in New York on Friday. That compares with levels of around $1,100 in November a year ago.
Several traders said demand for gold was up around 10 percent during haj but that high prices would deter purchases in the rest of the year.
“Despite the increase in the price of gold every year, we thought that sales would decrease, but there are increases in sales with the increase of pilgrims, and there are good purchases, Praise be to God,” said Abdullah al-Maliki, a gold retailer opposite the Grand Mosque.
Hoteliers expect up to 3 million pilgrims this haj, more than last year’s numbers when many stayed at home due to swine flu worries.
But Maliki said many people were reluctant to make bigger purchases, echoing comments by other traders.
“This year demand has been a bit weak. There is some movement now during haj,” said a gold trader, who gave his name as Abdullatif.
“For haj I decided to buy small gifts for kids costing not much,” said an Egyptian female pilgrim who gave her name as Najeya.
“At haj you need to buy gold as presents,” she said, haggling over prices.
Overall, retail gold demand volume in the Middle East during the second quarter of the year was mixed, with Saudi Arabia recording a 5 percent rise on the year and the UAE a 15 percent decrease, according to a report by the World Gold Council (WGC).
Gold demand in Saudi was driven by strong domestic consumption, and UAE demand tailed off in response to high prices during the second quarter, the WGC report added.
(Reporting by Ulf Laessing; Editing by Jane Baird)