(MENAFN- The Peninsula) Sachin Kumar | The Peninsula
Gold has become dearer by 15 percent this year, driven by high demand and volatility in global economy.
Price of one gram of 22 carat gold has jumped by around QR23 so far this year. A gram of 22 carat gold was trading at around QR150 at the beginning of this year, but it is now trading at QR172.50.
Similar trend was visible in 24 carat gold which has gone up from QR160 per gram at the start of the year to now at QR182.50.
Prices of the yellow metal in Qatar move in tandem with global prices because the prices here are linked to the international market, mainly the London bullion market.
'Global factors are driving the current rally in the prices of yellow metal. Buyers tend to become cautious when prices go up. They delay gold purchase and wait for the prices to come down. Gold sale is slow for the last one month because of high prices, sales manager of jewellery showroom told The Peninsula.
Apart from high prices, seasonality is another factor behind slowdown in gold buying. Summer is normally a dull period in terms of sales as most of the expatriates and citizens are out of the country for vacation.
'Sale of gold bars and coins is impacted most because customers who buy gold for investment are more susceptible to price rise. Currently, most of such investors are staying away from buying and they are in wait-and-watch mode, he added.
Gold prices have come down a little since the beginning of September, but analysts believe that prices may rise again.
Fears of slowdown in global economy due to prolonged US-China trade tensions and the risk of a no-deal Brexit have boosted the safe-haven appeal of gold this year.
The prices of gold have also got support from buying by global central banks. Many countries have been adding to their gold reserves as growth slows and trade and geopolitical tensions rise, and they seek diversify away from the dollar. US Federal Reserve, country's central bank, in July this year, cut interest rates for the first time in about a decade and analysts expect the US central bank to lower rates again in coming months. Lower interest rates boost the appeal of non-interest yielding assets like gold. It indicates that there is still some steam left in gold's price rally.
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