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The continued gold price hikes are posing a serious economic challenge to financiers. Saudi Arabia, the world’s biggest petroleum exporter, has been warned by New York-based Citigroup Inc. in September that it r..

03 Nov 2012

RIYADH(Commodity Online): Large number of jewellery shop closures have been reported in Saudi Arabia this year bringing the total number of closures in past five years to 1500 due to drop in demand following hike in gold prices.

The price of gold has soared from 424 dollars per ounce in 2006 to 1,715 dollars in 2012as per the data given by the Deputy Chairman of the Board of Directors of Mecca Chamber of Commerce and Industry Zaid Farsi, Reuters reported

According to Jon Nadler, Senior Metals Analyst at Kitco.com, the gold business in Saudi Arabia has gone from bad to worse with the closure of the 500th outlet in that country this year. Whereas the Kingdom once had over 4,000 gold shops, more than 1,500 of them have opted to leave the business owing to the elevated international price of the yellow metal and to the waning demand for it by local consumers.

The Hajj season did not translate into improved demand for gold and it saw the closure of some 30 gold-selling shops in the holy city of Makkah. Overall gold sales in Saudi Arabia have collapsed by 40 to 50 percent according to recent tallies, he added.

The continued gold price hikes are posing a serious economic challenge to financiers. Saudi Arabia, the world’s biggest petroleum exporter, has been warned by New York-based Citigroup Inc. in September that it  risks becoming an oil importer in the next 20 years.

Saudi Arabia is said to depend on oil for 86 percent of its annual revenue. The country produced 11.2 million barrels of oil and natural-gas-liquids a day in 2011.


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