Gold loses glitter in Bahrain as prices hit high globally
Gold is no longer glittering for Bahrain's jewellers as world record prices of the precious metal have kept customers away. They touched BD21 per gram yesterday, putting off many during what is usually a peak season, said a leading businessman. "International orders have also been reduced to a trickle and will dry up soon if the price does not stabilise," said Bahrain Chamber of Commerce and Industry gold and pearl jewellery committee head Mohammed Sajid Shaikh. He said there could be a minor correction in the next few days, but the trade expected the price to touch BD23 per gram in the next two to three weeks.
"Though the price had been increasing over the last few weeks and we have been losing customers we now fear the worst," Mr Shaikh told the GDN. "We have already received inquiries from customers who want to sell." Mr Shaikh said Ramadan was traditionally a time when people bought a lot of gold. "The increasing prices have meant people now want to sell what they have and get cash," he said.
Mr Shaikh was speaking as the price of gold touched an all-time high of $1,707 (BD644) per ounce in the international market yesterday in the wake of the US financial crisis and its economy being downgraded. "This price increase has come at a very bad time, just as the trade in Bahrain has been recovering after the recent crisis," he said. "The local market notwithstanding, we are now battling to save our international orders. The situation is grim." Mr Shaikh said traders were hoping for government intervention to bail them out.
"We are already reeling under the effects of the recent crisis, inadequate overseas orders as well as problems like traders being asked to relocate out of the Manama suq," he said. The businessman said traders were also facing an acute shortage of skilled craftsmen and had been unable to recruit workers due to the government's 20 per cent Bahrainisation policy.
Mr Shaikh said skilled persons like diamond cutters, engravers and polishers were not available among Bahrainis so they had to depend on expatriates. It was earlier claimed the gold trade lost more than $1 million (BD378,000) a day in the week businesses remained shut between March 13 and 19.
Some of Bahrain's gold workshops reportedly relocated to the UAE because their workshop permits had not been renewed or were rejected by municipal authorities based on health, environment and security issues. Jewellery manufacturers in the suq have also been forced to share equipment and manpower to survive.
The Industry and Commerce Ministry previously said Bahrain's gold industry had an international reputation for precision manufacturing and the beauty of its traditional designs and high quality.