Cut-throat war forces jewelry shops to offer huge discounts

About 70 percent of jewelry business in the Gulf depends on Saudi market. — Courtesy photo

Saudi Gazette report

DAMMAM — Jewelry shops in the Kingdom recently offered discounts up to 70 percent on their merchandise, prompting an investigation by the Ministry of Commerce and Investment. The probe was initiated after thousand of people were seen thronging jewelry outlets of a particular brand, Al-Hayat reported.

Sources revealed to Al-Hayat that the Ministry of Commerce and Investment did not find any violations on the company that attracted the largest number of customers during the last ten days of Ramadan, in preparation for the Eid Al-Fitr season. The same sources said, "Shops belonging to one company caused a problem for other shops in the open markets and shops located in other commercial complexes, showing that yellow gold, according to caliber and weight, but the discounts are on diamonds and silver."

Similarly, gold markets witnessed an unstable decline in net weight prices, reports said. Abduljabbar Ali, a gold market investor in the Eastern Province, said: "Prices reached an average of SR151 for 24 carat gold. Gold of 22 carat reached SR138, the 21 caliber did not exceed SR132, while the 18 caliber reached SR113 during the last ten days of Ramadan."

As for the overcrowding and the high demand and purchase, he explained that "Usually during the last week of Ramadan, the market is highly active. Competition in gold and diamonds peaks." He confirmed that there is an expected boost that should take place in gold sales during vacations generally ranging between 20 and 25 percent.

He pointed out that the Saudi gold market is one of the best markets in terms of the abundance of local manufacturing, and about 70 percent of jewelry business in the Gulf depends on Saudi market.

A former member of the gold committee in the Eastern Province Chamber of Commerce, Abdul Aziz Khalifa, said: "Supervision is within the jurisdiction of the Ministry of Commerce and Investment, but it is noted that the markets have imported gold that left a significant impact on the market, and we — traders of gold in the Saudi market — for years have been aiming to achieve the goal of continuing to work and combat negative phenomena."

Gold markets in the Kingdom are the largest in the Gulf and Arab countries. The number of gold, jewelry and precious stones stores is estimated at 3,000, distributed over major cities like Riyadh, Makkah and Madinah constituting 80 percent of the size of the local gold market.