Gold Prices Jump 7pc to BD46.100 a Gram
Gold prices in Bahrain have jumped by nearly BD3 a gram in a week, pushing 21-carat gold to about BD46.100 at some shops as a worldwide rush into bullion feeds straight through to local buyers.
The rise of about 7pc came in two sharp bursts. Gold climbed hard on Wednesday before another surge on Friday took the world price above $4,300 an ounce and to a seven-week high.
Spot gold rose about 2.4pc on Friday to $4,341.69 an ounce after gaining more than 3pc earlier in the session. Its weekly gain topped 7pc, the metal’s best week since January.
At an ounce price of about $4,342 and Bahrain’s fixed exchange rate of BD0.376 to the dollar, 24-carat gold works out at roughly BD52.5 a gram. The figure for 21-carat gold is about BD45.9 before shop margins, workmanship and other charges.
The dinar’s peg to the dollar means moves in world gold prices pass quickly into Bahrain. The same pattern was seen across Gulf markets, where currencies are closely tied to the US dollar.
Friday’s rise followed US jobs figures showing payrolls fell by 23,000 in July, against forecasts for an increase of about 80,000. The figures cut the odds of a rise in US interest rates and sent Treasury yields and the dollar lower.
That helped gold. Lower yields make the metal, which pays no interest, more attractive, while a weaker dollar cuts the cost for buyers using other currencies.
Traders are also watching tensions in the region and shipping through the Strait of Hormuz because of the possible knock-on effect on oil, inflation and the path of US rates.
Gold sellers in Bahrain said the price jump was already changing buying habits. Some shoppers are putting off jewellery purchases or buying less, while demand for bullion bars has held up well.
Some couples preparing for marriage have moved early, buying gold before the wedding season in case prices climb again.
Ahmed Emad, owner of Al-Omdah Jewellery, said 21-carat gold had reached about BD46.100 a gram as world prices rose and investors turned to gold as a store of value during uncertain times.
He said several shops had seen strong demand for 24-carat bars in a range of weights.
Some wedding buyers had also bought gold sets ahead of the season expected to pick up over the next two weeks, he said.
Mr Emad said that had helped sales at a number of shops and expected bullion demand to remain firm as buyers watched world prices and political and economic events.
Mohammed Al Khoor, of Miss Gold jewellery, said the latest jump had left many customers waiting to see where prices go next.
Some could delay buying jewellery or cut the amount they buy, he said, while demand for bars and investment gold had proved more resilient.
Mr Al Khoor said prices were likely to keep moving sharply as markets track geopolitical events, the dollar, bond yields, US interest-rate policy and shipping through the Strait of Hormuz.
He said gold buying was usually softer in the first months of the Hijri year before rising around Rabi Al Awwal and the wedding season.
Buyers, he added, were also likely to grow used to the higher prices if they stayed in place for some time.
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