(MENAFN - Arab News) More than 1,500 gold and jewelry shops in the Kingdom have been closed down during the past five years as a result of increasing gold prices and decreasing demand for jewelry, according to the Makkah Chamber of Commerce and Industry.
Ziyad Farsi, deputy chairman of Makkah Chamber, said many gold traders in the Kingdom had suffered heavy losses as a result of a sharp fall in sales.
"Many of these traders have been supporting their jewelry shops using revenues from other businesses," Farsi pointed out.
Farsi said gold prices went up again on Monday, adding that rising exchange rates of US dollar would reduce profits of traders in the Kingdom.
"Gold received little support last Friday following a statement showing US economic recovery in the third quarter of the year," the Saudi official said.
Gold prices advanced at the domestic bullion market yesterday on firm demand from dealers amid stray festive buying interest. Silver also climbed up on good speculative off-take.
In Europe, gold gained in thin trade amid weak dollar as investors played safe ahead of US jobs report due later this week. Spot gold was bid up at 1,714.10 an ounce in early trade and silver was bid higher at 32.08 an ounce.
"The increase in prices have discouraged people, especially pilgrims, from buying gold. In the past pilgrims used to buy large amounts gold and jewelry," Farsi said. He said more than 1,500 from a total 4,000 gold shops in the Kingdom have left the market due to the unfavorable situation.
Abdul Rahman Al-Jefri, a member of the gold committee at Makkah chamber, said rising prices coupled with global economic depression were some of the reasons for the fall in gold and jewelry sales during this Haj season.
"The sales in Makkah will not reach 20 percent of the volume of gold displayed at showrooms," he pointed out. In the past we had 60 percent sales during the Haj season, he added.