Retailers, customers concerned about whopping surge in gold prices

Some retailers say prices will continue to increase in the coming days

Godwin Isaac K

DOHA: The recent surge in gold prices has sent shockwaves through the jewellery industry as well as customers in Qatar, sources in the jewellery trade have told News Trail.

The prices witnessed a whopping 35 percent increase in the last 30 days alone, and it has left gold retailers, especially small-scale jewellers, grappling with the challenges of maintaining profitability in the face of escalating costs.

The price of 22 carat gold per gram in Qatar on Sunday was QR 273.

As global economic uncertainties continue to drive investors towards safe-haven assets, local jewellery shops are feeling the pinch, with customers hesitant to make purchases amid soaring prices.

In Qatar, where gold holds cultural and traditional significance, the impact of these price fluctuations is acutely felt, particularly by smaller, family-owned jewelry shops.

“We’ve seen a noticeable increase in the prices of gold recently, and it is definitely affecting our business as it grows duller as days pass. Customers are more hesitant to buy gold jewellery now, as they perceive it as an increasingly expensive investment,” Mohamed Faizar, owner of a small jewelry shop in Doha, said.

The rise in gold prices can be attributed to a multitude of factors, including geopolitical tensions, inflationary pressures, and fluctuations in currency values.

Uncertainty surrounding the global economic recovery has further fueled demand for gold as a safe-haven asset, driving prices upwards and squeezing profit margins for retailers.

For small jewellery shops, which rely heavily on local clientele, the impact of rising prices is particularly pronounced. Many owners are faced with tough decisions, including whether to adjust prices to reflect the higher cost of gold or absorb the increased expenses themselves.

However, large jewellery retailers are trying to withstand the surge in prices through promotions and offers.

Santhosh T.V the Regional Head of Malabar Gold and Diamonds Qatar, stated: “We are not that much affected by the increase in the gold rates. People see gold as a good investment and the only difference I see during this price hike is that the quantity of purchase by a customer may have reduced but I see a lot of people showing interest in buying gold. We have good offers and discounts which help the customer get a lower price in the market.”

“My advice to all customers is that gold prices will continue to increase in the coming days and so see this as an investment as it will always give you returns,” he added.

Major jewellery retailers remain largely unaffected by the price increase due to their schemes and offers, coupled with the loyalty of many customers to the brand, who are willing to spend despite the rise in prices.

But small business owners, despite the hurdles they face, remain optimistic about the resilience of Qatar’s jewellery industry and are exploring new strategies to navigate the current landscape.