Local shop owners have said sales have increased by up to 25 percent from just a month ago after a drop in gold  prices in the Kingdom and around the world.
“We have seen a significant sales increase  of up to 25 percent due to a fall in prices and the increase in the number of Umrah visitors who usually buy gold during their visit to the holy land,” Ahmed Al-Shammari, a salesman at a shop in Jeddah’s gold souk, told Arab News.
According to goldrate24.com, average prices on June 20 were SR166 per gram for 24-karat gold, SR150 per gram for 22-karat gold and SR124.50 per gram for 18-karat gold. Earlier this month, prices dropped to SR155.76 for 24-karat gold, SR142.77 for 22-karat gold and SR116.78 for 18-karat gold.
“One of the main reasons for the global price decline is the fear that ailing European central banks, tired of printing money, would liquidate their gold reserves to cash,” said Pradesh Unni, a financial analyst in Dubai.
He said that this has affected Saudi Arabia and the GCC due to their strong trade ties, which sees the Gulf importing up to 80 percent of their goods from the EU.
Unni stated that he expects that since gold is being used as a safe haven against global economic uncertainty, that once sentiment improves in the EU, prices of gold would again increase .
“It would take a massive blow to either the EU or US economy to keep gold prices in their downward trend. Otherwise, we can expect gold prices to again rise  by the end of the year,” Unni said.
Gold sales began to slip worldwide in 2011, with skyrocketing prices causing the World Gold Council to suspend its activities in Saudi Arabia.
The WGC stated that the market was simply too weak to continue its presence in the Kingdom and added that both China and India have become more attractive markets.
Saudi Arabia was the fifth largest consumer of gold in 2006, falling to 10th place by 2011.
The Kingdom’s total demand dropped by 12 percent, from 82.1 tons in 2010 to 72.2 tons in 2011 and accounting for about 36 percent of gold demand for the Middle East.