10 August 2008
Gold merchants in Dubai are expecting the price of the precious metal to come down in the short term and remain stable in the near future due to the easing of political tension in the Middle East, strengthening of the dollar and profit booking by speculators and gold investment funds.
People in the gold and jewellery industry Emirates Business spoke to said a variety of factors both economic and, mainly, political are responsible for the fluctuations in the price of the yellow metal.
“Gold prices came down to $850 per ounce on Saturday, which is still a very high price compared to the production cost of around $500 per ounce. This decline in the price corresponds to the decline in crude oil prices from $140 per barrel to $114. More than economic factors, it was the political uncertainty surrounding Iran that caused fluctuations in crude prices,” said M M Ramachandran, Chairman of Atlas Jewellery, Dubai.
According to him, gold sales in Dubai have shot up substantially, mainly because of declining prices and the increased inflow of foreign tourists.
“Almost all Emirates’ flights are full and tourists, including from the United States and Europe, are coming to Dubai in large numbers for their summer vacations. Expatriates from Dubai leaving on vacation are also buying gold and the easing of gold prices has caused our sales to double,” Ramachandran said.
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