Gold has been flying off the shelves in Bahrain over the past week as the price of the precious metal plummeted, a report said.

Traders in Manama have reported up to a 15 per cent increase in sales, after prices hit five-year lows, reported the Gulf Daily News (GDN), our sister publication.

Within one four-day period, the retail price of 24k gold jewellery dropped 300 fils per gram, according to Malabar Gold and Diamonds manager Shaiju Kuriachan.

“The price fell from BD13.800 ($33.6) on July 19 to BD13.500 the next day, which was its lowest in five years,” he said.

“In the following days it fell further, with the price recorded at BD13.200 on Thursday.

“Business has increased by between 10 and 15 per cent as families took advantage of the drop to buy jewellery and investors bought coins and bars as savings.

“A reduction of gold price such as this is good for business, and we are happy about it.”

Joyalukkas showroom manager Vinod Kumar said that customers were delighted with the fall in prices.

“Business went up by 15 per cent in just three days (July 20-23) and was up 20 per cent compared to this time last year,” he said.

“Despite making purchases during and before Eid Al Fitr, families are still enthusiastic and are buying jewellery and ornaments, taking advantage of the fall in price.

“There are also customers who are buying gold bars and coins for investment purposes. Apart from these, we also have sellers who doubt the price will fall further.”

Speculators have been blamed for the most recent gold price slump, as the price fell by more than 4 per cent to $1,086 an ounce on Tuesday after traders sold 57 tonnes of gold in Shanghai and New York.

However, the price of gold has been falling steadily since a peak of $1,900 an ounce in September 2011.

Bahrain Chamber of Commerce and Industry (BCCI) pearl, gold and jewellery committee vice-chairman Mohammed Hussain Malim described the most recent price drop as “expected”.

“The fall in the price of gold was not a surprise,” he said.

“But it may not remain at this level for a long time, again it will reach $1,200 per ounce level and then may remain there. When the price peaked, several people sold their jewellery to take advantage of the boom times.

“They may now buy this back, which will boost the market and moreover, this is the right time to buy jewellery,” he added.

Committee member and Al Mahmood Pearls general manager Mohammed Abdulrazack Al Mahmood said that Bahrain’s economy is set to benefit from the fall in price.

“The price fall will help gold manufacturing and at the same time support two types of customers – the casual buyers and investors,” he said.

“The price reduction is also a sign of the value of our money going up in the global market.”

The GDN reported last week that Bahrain’s gold jewellery exports increased by 20 per cent to 25 per cent during Ramadan and the Eid Al Fitr holiday compared with last year.

According to GCC Gold, Pearls and Jewellery Association chairman Mohammed Sajid, demand for Bahraini gold in Arab markets remained high, especially in Kuwait, Saudi Arabia, the UAE, Qatar, Sudan, Libya and Yemen.

He said that Bahrain’s gold sales are expected to reach about 5.5 tonnes by the end of the year, compared with 3.5 tonnes last year. – TradeArabia News Service