DOHA: Gold prices in Qatar drifted near its five-year low yesterday with 24-carat gold trading at QR136 per gramme, close to five-year low of QR134 per gramme on July 31 this year.
Expectations that the US central bank may raise interest rates today was the major factor behind gold’s fall. A gramme of 22-carat gold was trading at QR128 yesterday. Lower prices are positive news for customers as Eid Al Adha is around the corner.
“I expect the sales to jump 60 percent in the next few days as falling prices, coupled with Eid Al Adha holidays, will prompt customers to buy gold,” Joseph M P, Sales Manager, Sky Jewellery, said. “Employees are likely to get salaries earlier because of Eid holidays which is good for sales.”
Jewellery shops faced dull trade in the past two months because of vacations and hot weather. July, August and September are usually lean months as residents go on vacations. They come back in September when schools open and their priority is to buy books, stationery, uniforms and other school related items.
Gold prices are falling taking cues from international market. Yesterday, an ounce of gold in international market plunged to $1,105. On Wednesday, gold traded at QR136 per gramme in local market but closed the day at QR137. Gold has fallen about 35 percent compared its peak days in October 2011 when it was around QR210. For the past two months 24-carat gold has been trading at QR143-QR140.
“Gold may fluctuate sharply in the near future but it is likely to fall further in the next three to six months because the US central bank is likely to raise interest rates,” said the branch manager of a jewellery store. The increase in interest rates in the US pulls gold prices lower because it strengthens the dollar. This prompts more fund outflows from gold and other commodities to the dollar.
