Decreasing gold prices redraws map of its market in Saudi Arabia

At a time when «gold» is being traded at its lowest price in nearly five years, the new prices become an important attractive method for Saudi traders to enter it again, this comes after the exit of some of them during the past three years due to the price rise which has reached record areas.

The yellow metal is considered one of the most acquisitic mineral for decorations, but it also is an important haven for investors in the country, but the high prices which approached the barrier of $ 1900 for an ounce during the past few years, making the demand for the yellow metal decrease in the Saudi market.

At the end of the week on Friday, gold continued its losses in the global market, where it has been traded at $ 1082 for an ounce, this came amid renewed losses, which made sales operations more severe in the global markets, prompting analysts of yellow metall, to determine the barrier of $ 1070 as a mission support point.

In this regard, Hussein al-Khalifa, the owner of competent factories, confirmed to «Middle East» yesterday that the demand for buying gold in Saudi Arabia has become more active during these days, and said: « declines of gold prices consistent with social events season in Saudi Arabia such as marriage parties and the like ».

The Caliph confirmed during his speech, that since the summer vacation in Saudi Arabia, and the price of gram of gold stood at 115.5 riyals (30.8 US $) without counting the cost of workmanship wages, pointing out that the workmanship wages ranging from two riyals to 6 riyals (0.53 and 1.6 US $), explaining that it may reaches up to 24 riyals (6.4 US $) depending on the quality of manufacturing.

Regarding silver, the Caliph said: «There was a demand for silver in Saudi Arabia, especially when gram of gold reached above 200 riyals levels (53.3 US $), but today silver price has risen, compared to decreasing of gold prices, and the silver manufacturing wages does not stray too much about the cost of gold manufacturing wages. »

On the other hand, Faisal sword, an investor in the gold sector, tressed that a number of private traders who invest in retail selling, closed many branches of their shops due to high prices, he said: «prices fell by up to 40 per cent, pay some of them to think seriously about a return to more closed branches, especially since demand in Saudi Arabia is witnessing a marked improvement too ».

These developments come at a time when many investors now fear of the continuation of bleeding of gold prices, as the yellow metal would lose «safe haven» feature, as it is called by many.

Specialists spoke to «Middle East» earlier, that what is happening in the global gold market is the result of violent speculation, but they played down the impact of such speculation on sale in the Saudi market movement, especially as the seasonal period for gold sales are approaching, in the date of annual leave when there are alot of occasions, weddings solutions.

Specialists predicted decline in the gold market in the long term, in light of the expectations of the emergence of new competitors such as diamonds and precious stones, as well as the world's inability to dispense with its need for oil and its products, pointing to Saudi Arabia's ability to achieve a balance in production and determine a fair price.

Analysts: Stability of the local market is an evidence of the Saudi financial market strength after collapse of Chinese market

In the wake of the collapse of the Chinese market and the impact of the euro region due to the problem of Greece, and fears of global financial markets from a global economic catastrophe after a painful blow to the second largest economy in the world, the Saudi capital market remains positive with change rate of 2.47%,

 Experts expect that; Saudi financial market stability despite influence of global markets is a sufficient evidence on the local market power; which will make global eyes focus on it to invest in, also they argued at the same time that it is difficult to judge the end of the losses in the Chinese market, which rebounded on Thursday, rising nearly six percent after the Beijing attempts succeed to stop declines that rocked global financial markets Finally, the strongest step yet to support the market was that Chinese Market Authority banned sailing on the shareholders of large stakes owners in listed companies. Separately, the central bank said it would allow banks to extend loans supported by shares.

Initially Talaat Hafez the financial expert and general secretary of the Committee of Information and banking awareness at Arabic banks has affirmed to »Al Youm» that the Chinese economy is one of the largest economies in the world which is growing at 10% annually, as it owns a lot of resources and its foreign investment outside  China reaches up to trillion dollars, which is one of the largest states in the volume of foreign investments, and this reassure the return of the Chinese financial market and it is known that the occurrence of any collapse or a setback or terminal decline in the Chinese financial market will impact on the economy of the world and thus affect the Saudi economy in the financial and banking sectors, indicating the return of the Chinese economy soon and the Chinese government will take procedures for the return of the Chinese market to what it was.

Hafiz said that the Saudi economy is robust economy which has grown in the past year to 3.5% from 5% in previous years, due to the decline in oil prices and he expected that Saudi Arabia's economy will not affected directly due to the decline in the Chinese capital market, it is possible that the Saudi financial market may be affected by the crisis; because of psychological effect not real, because of the lack of Chinese companies in the Saudi capital market affect directly on the local market, with regard to the existence of a large commercial exchanges between the two countries Hafiz stressed that exports and imports won't be affected between Saudi Arabia and China with regard to trade between the two countries.

Hafiz said that the Saudi banking market will not be affected by the crisis; as it adopts in first priority on the employment of capital, deposits and investments inside the country, which exceeded 2 trillion in the second half of this year and the distribution of investment in the trading in banking market in the Saudi market inside the country on the outside account, noting that foreign assets are not great in number compared to the domestic assets in Saudi banks.

According to an analyst at the financial market Mohammed Bin Ali Al-Rajhi: the Chinese market collapse has no link to the Saudi financial market, but the negative consequences will be limited to the Chinese market, stressing that in the event that the sudden descent is associated with negative consequences for Chinese companies, will have an impact on the local market, and in If there is no justification in the Chinese capital market decline, there will not be any damage to the global and local stocks market.

And Al-Rajhi clarified that the financial market will see a coherent tends to rise, and the most likely cause of decreasing stocks value in the previous period was not because of the Greek crisis or a global crisis, as some believe, but before the Greek crisis, as some thought that the entry of foreign investors will create a positive backlash but the fact came unlike forecast which contributed to successive declines in the past period.