The holy month of Ramadan is considered to be one of the most profitable times for gold sellers across the peninsula.
Mohammed Al Salahi, Executive Director of Al-Salahi Holding Group, has confirmed that the gold market in Qatar is currently experiencing a significant recovery, with sales jumping by 40 – 50% since the start of Ramadan.
Gold traders are witnessing a significant recovery in sales during Ramadan despite the rise in prices, new reports indicate.
Every year, gold sales in the Gulf nation experience a surge in activity during the holy month of Ramadan due to the culture of buying gold gift sets for personal use or for loved ones to celebrate the start of the month.
This increase can reach up to 50% at its peak, making Ramadan one of the country’s busiest seasons for gold traders.
Most of the buyers, according to the official, are Qataris who prefer traditional gold jewelry.
“Gold is still the best gift that is dealt with so far, and Qatari families are keen to acquire gold and also exchange gifts of gold, because of its high value, as it retains its value in most cases even if markets have been volatile,” the official told Qatar News Agency (QNA) in a statement.
The perfect gift that never loses value
Many people consider gold a valuable gift as its stability in price compared to other global markets render it a popular investment choice.
Gold is also seen as a safe currency during times of crisis and the best vessel for investment and savings. This perception further drives the demand for gold during Ramadan, as individuals look to invest their money in a stable asset.
In addition to its financial benefits, gold is linked to Qatar’s famous heritage, particularly the country’s unique designs passed down through generations. Gold dealers in Qatar anticipate the Ramadan season to display their new designs and collections to meet the growing demand for gold during this time.
Garangao: The Gulf’s favourite Ramadan tradition
In the Gulf, the midway point of Ramadan is a time of celebration that sees children take to the streets with excitement ahead of the final two weeks.
Sweets, nuts, gifts and games are staples of the time-old Gulf tradition known as Garangao – a practice celebrated after sunset prayer on the 14th day of the holy month.
The celebration is believed to have its roots in the pearl-diving traditions of Qatar and is observed all over the region where it is known by various names.
It is also the trader’s favorite celebration, as many people flock to buy ‘traditional’ looking gold with an extremely unique design to wear during the celebration, hence the spike in sales for many shops.
Normally, the gold worn during the tradition is heavy and has plenty of design, attracting more revenue for the makers.
“With the approaching night of Garangao in the middle of the holy month, sales rise above these percentages, due to the high demand for gold, handicrafts, and designs related to heritage and traditions, as families and relatives exchange gifts, and gold is the best gift on such occasions,” the official told QNA.
Economy drop, price increase
Gold has recently witnessed a spike in prices due to the financial crisis the market is experiencing.
Al Salahi discussed the relationship between gold prices and economic and political factors, noting that gold prices tend to increase during times of political crises and economic fluctuations. This is often due to factors such as a strong US economy, a rise in the dollar strength index, and an increase in interest rates and yield on US Treasury bonds.
This year, gold prices have fluctuated between 1800 and 2000 dollars per ounce, with inflation playing a significant role in price changes.
Though it has not affected most sales in the region, the price difference is still considered significant compared to previous years. Recent weeks also have seen a sharp increase in gold prices due to various bankruptcies in US entities.
“In the current year, gold prices are ranging between 1800-2000 dollars per ounce, and the inflation factor plays the most prominent role in the fluctuation of its prices between those levels, but what happened in recent weeks, when some US banks declared bankruptcy, gold prices jumped above the ceiling of 2000 dollars per ounce,” the official explained.
Regardless of this however, gold is often considered a safe-haven currency during global financial market turmoil, and Al Salahi believes that gold prices are unlikely to exceed 2080 USD per ounce unless there are new developments or bankruptcies.
In terms of future expectations for gold prices, the official stated that predictions of a significant increase in prices are often misleading propaganda designed to actually raise the prices.