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The price of the precious metal is now at a critical juncture and has brought panic in the market as buyers seem to follow wait and watch policy – By Samuel Kutty – MUSCAT — Many today know the price of everything but the value of many things is not known. Same is the case with gold. Considering gold purely in terms of its price is a wrong concept and what is more important is its value.
The price of the precious metal is now at a critical juncture. Risk aversion on the back of the S&P downgrade of US debt sparked a buying spree as investors see gold as a safe haven for value deposits. But in the capital area of Muscat, a mixed trend in sales was reported from jewellery shops last week.
According to Najeeb K, country manager, Malabar Gold, his shop in Ruwi registered 20 to 25 per cent rise in sales last week. “There is absence of small-time buyers, but investors with long-term vision do come to buy gold to keep it as future asset,” he says. “The price has been a motivating factor for demand.
Consumers expect gold prices to continue rising. This belief fuelled demand highlighting the strength of the investment component of gold jewellery,” he adds. Gold was being sold at
RO 20.950 per gram yesterday. The jump in prices “has brought panic in the market… physical players are absent at the moment. I think more buying will come in if prices stabilise in a few days,” says Aju, shop in-charge of Sky Jewellery, which too registered more sales during the week.
At the same time, shops appeared deserted after the US downgrade spread to the market. At certain point, salesmen were seen sitting idle or watching TV news reports about bullion roaring to record highs.
“We had a few people enquire about today’s price, but no one wants to buy now, because they are waiting for some clarity on whether prices will go down, in which case they would like to wait a bit,” said Ahinav Parekh, a sales manager at another shop.
“There is buying intermittently, but day-to-day business is not as same as it was the previous week. The problem is, people don’t have the required funds to meet the rising price,” he says.
“This air of uncertainty is not good. People want prices to stabilise, even if on the higher side. They want some clarity,” he adds.
“It’s an investment that I am making. It’s gold at the end of the day and if it’s RO 20.950 per gram now, it will be much more tomorrow. My children may have to buy it for the double price after a few years,” says Annie Cherian, a housewife while scanning through glittering ornaments at a shop.
But shopkeepers expect the sales to pick up in view of the onset of the traditional festival and wedding seasons in India. Even in the local market Indian community forms the largest gold customer segment.
Traders say that there could be more investors, who are keen to allocate their assets into gold as a store of value, and for capital preservation.
For years now, the price of the yellow metal has been in an incredible climb as it is the only worldwide accepted measure of value. From jewellery to a store of wealth, gold plays a major role in the economies and lives of people. – Source: omanobserver.om