(MENAFN - Arab News) Saudi gold traders in Makkah and Jeddah complaining about low demand for gold and difficulties they face are looking for ways to boost the market. The traders also object to the inequality between Saudi traders and foreign investors in the gold market.
"The gold sector still suffers from high prices, which lead to the dismissal of large numbers of employees and the shutdown of many gold shops," said Ziyad Farsi, deputy chairman of the Makkah Chamber of Commerce and Industry.
He said investors and employees in the gold market were the worst affected following a slump in the sale of gold due to high prices.
"We arranged a meeting to discuss our weak position and came to the conclusion that many investors are leaving the market and sacking employees. However, the sudden decrease in gold prices that happened recently is considered temporary," he said.
Farsi emphasized the fact that Saudi investors in the Kingdom are struggling to survive in the market.
"Besides the low sales rate, Saudi investors also find many obstacles in gold investment, unlike foreign investors," he said.
According to Farsi, the pressure on Saudi gold traders is too much in comparison with foreign investors. "We are looking for equality between foreign and Saudi investors in terms of benefits, rights and duties. Saudi investors face several obstacles due to government rules. Foreign investors, by law, get the advantages of easier procedures and better services," he said.
Farsi stated that gold sales in the Makkah region were very weak despite the high demand for gold during the Umrah and Haj seasons.
"We are trying to rescue the gold industry in Saudi Arabia by giving more facilities to Saudi gold traders. In addition, we are looking to revive the old gold souk (a traditional gold market located in Makkah). This souk could revitalize Saudi traders and improve sales of Saudi gold products.
Tariq Fitaihi, a Saudi gold trader and member of the gold committee at the Jeddah Chamber of Commerce and Industry, said competition in the gold market had become tough due to the facilities foreign investors are getting in Saudi Arabia.
"Foreign investors get the facilities to establish their own companies and to deal with qualified foreign staff. They also contract many experts in the field of gold and jewelry.
"In contrast, Saudi traders are forced to apply full Saudization and deal with staff who are fresh in the field and lack creativity," Fitaihi said.
He added Saudi gold traders were forced to leave the industry because of several elements, such as competition with foreign investors, high gold prices and policy changes that encourage foreign investors to work in the gold sector."
Farsi called for holding a forum that brings together all Saudi gold traders to find solutions to the crisis in the Saudi gold sector and to call for equality with foreign gold investors.
According to Farsi, one of the major factors for a further rise in gold prices in the coming year would be the increase in consumption by China, but he thought the Makkah gold market would continue its slowdown. "The increase in sales during the Haj and Umrah seasons is not sufficient to make up for losses incurred during the rest of the year," he said.