DAMMAM: Gold dealers in the Eastern Province are expecting to make record profits during the summer holiday and the wedding season this year. Muhammad Ibrahim, who has been in the business for more than three decades in Dammam, expects demand for the precious metal to increase in line with soaring prices on the international market. There is no indication that the price will decline with a weakening dollar, he added. The price rose to around $1,540 an ounce this week. Ali Al-Dajani, a gold dealer in Dammam, said the demand for gold ornaments has increased because of the wedding season and the end-of-year examinations. “Parents buy different types of ornaments to celebrate their children's success. Added to this, the summer vacation attracts several women who buy gold because this is when shops display their latest designs.” He said it is highly unlikely that prices will fall to the level seen in the sixties and seventies because of the current state of the world economy. There has also been a fall in production around the world, which is driving up the price, he added. Abdul Latif Al-Nasser, a customer, said many women, especially brides, wait for the summer vacation because this is when competition is the most intense among owners, with everyone displaying new designs. He said most merchants conclude deals with gold workshops to get the latest designs one month before the final examinations. He said soaring prices have forced several families to cut their budgets for the weddings of their children. The budget for a bride ranges between SR20,000 to SR25,000 while it jumps to SR100,000 for a groom. The price of one gram of gold is SR195 and the price of one kilogram is SR195,000. Muhammad Al-Hamad, Chief of the Gold Committee at the Chamber of Commerce and Industry in the Eastern Province, said market indications point to record sales this year. Most businessmen are impatiently waiting for the summer festivals and holy month of Ramadan when sales invariably shoot up. Saudi Gazette previously reported that Saudi gold consumption will rise in 2011 to SR19 billion compared to SR14 billion in 2007. The demand for gold in the Kingdom is at 200 tons a year while there are six million shops, mainly in the Eastern Province, Riyadh and Jeddah. The Kingdom's high gold sales are also based on the purchasing power and presence of over six million pilgrims during the Haj and Umrah seasons. The Saudi gold market reportedly ranks fourth in the world after the US, India and China. A few buyers have criticized some gold shopkeepers for raising prices unnecessarily, especially for small pieces, charging SR33 commission per gram when the profit range of SR10 to SR11 is considered reasonable.
