Shining bright

Shining bright

Gold prices reached a record high on Monday, crossing $1,130 an ounce. But even as investors stock up on the metal, it has stopped dazzling retail jewelers and consumers.

November 16, 2009 4:49 by Aarti Nagraj

But even as investment demand remains strong, demand for gold jewelry is reducing, it added. “High gold prices are deterring discretionary spending for gold jewelry amid weak economic conditions in developed economies. In India gold prices above $1,100 have stunted demand despite the wedding season underway, a typically strong period for gold jewellery demand,” CPM said.

And it’s not just in India; the increasing gold prices have spelled disaster for the retail gold jewellery industry across the world. Outlets in Dubai have seen sales slipping by between 40 percent and 75 percent this year, traders told Khaleej Times last week.

And gold jewellery sales in neighboring Abu Dhabi dropped by around 30 percent in October as compared to last year, Reuters reported on Thursday. “Business was slow last month, even regular shoppers have disappeared. The only hope is if prices go down,” CK Sajid, manager at Joy Allukas Jewellery told the agency.

But going by analysts’ predictions, that may not happen anytime soon; some say gold prices may even reach up to $1,500 by the end of this year or the next.

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Tags: buy, dollar, gold prices, increase, jewellery, Retail