(MENAFN- The Peninsula) By Sachin Kumar | The Peninsula
There is no impact of ongoing illegal blockade on Qatar by siege countries on either prices or supply of gold in the country. The supply of gold is enough as the yellow metal is now being supplied from Oman.
'There is sufficient supply of gold in the local market and the siege has had no impact on the gold prices. Prices of the yellow metal are determined by international prices. Prices begin to rise after the build up in the tensions between US and North Korea, Joseph M P, Sales Manager, Sky Jewellery told The Peninsula. 'Earlier, gold was coming from Dubai and now it is coming from Oman. So there is enough supply of the yellow metal and we have not seen any interruption in the supply of gold, said Joseph.
Gold prices have jumped around 16 percent since the beginning of this year driven by international factors — mainly the tension between US and North Korea.
In the past eight months, one gramme of gold has become dearer by QR21. A gramme of 22 carat gold is currently trading at QR153 in Doha, significantly higher than the start of January this year when it was trading at QR132. Similarly, prices of one gramme of 24 carat gold have jumped to QR163 now from QR142.
However during the past couple of weeks, gold prices have started showing signs of softening. Prices of 22 carat gold had reached a high of QR156 on September 8, as the tensions developed between US and North Korea but now prices have come down to QR153 per gramme.
'The US dollar has been weakening in the international market for some time and that is the main reason for pushing up the prices of gold. The demand for gold in Qatar is usually not impacted by much by the volatility in the prices. The demand for gold peaks during the Holy Month of Ramadan and Eid Al Fitr, said a sales manager, at a jewellery showroom.
Prices of yellow metal in Qatar move in tandem with its global prices because prices of gold here are linked to international market, mainly the London bullion market. Weakening of US currency also works in favour of the yellow metal.
A weaker dollar fuels demand for gold by making it cheaper for holders of other currencies, while lower bond yields reduce the opportunity cost of owning non-yielding bullion. 'There was a lull in demand in the first two weeks of this month because residents were in summer vacation.
The demand for gold is expected to increase in the coming days as people have begun to come back from vacation, said Joseph.
Receding expectations of a US interest rate increase in December by the US Federal Reserve were also pushing investors to gold. Gold is highly sensitive to rising interest rates because they push up bond yields and tend to boost the dollar.
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