Friday, March 21, 2008

Middle East Jewelers Say Gold Sales are Dropping

Last year those jewelers in the Middle East thought they were going to have another banner year, but contrary to that assumption, prices have declined, rather than increased by the 15 percent expected because of the alleged demand.

The problem is gold is now considered by the middle class there as a means of generating income because of the high prices.

“Middle income earners are selling rather than buying to gain profit,” said Mohammed Abdullah. “Most of our customers buy gold and jewelry for personal use rather than as a form of investment. We hope prices will drop but in view of what is happening with the market’s fluctuations, I don’t believe this will be the case."

Other gold shop owners said their business is down, but nowhere near some of those that say sales are down by up to 70 percent.

As a more experienced shop owner said, “Our sales dropped only five percent compared to last year.”

It seems what's happening is the surge in the price of gold has brought a lot of newcomers into the field, who don't know how to manage the ups and downs of the business. That is probably what's accounting for the large disparity in sales declines.

Either way, contrary to Asia, physical gold sales have fallen in this part of the world over the last year.

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