SYRIA: High prices cause drop in sales of gold jewellery

Record ID: 278543

  • Title: SYRIA: High prices cause drop in sales of gold jewellery
  • Date: 9th December 2009
  • Summary: HALA KHOURY, A JEWELLER, WORKING IN HER SHOP KHOURY'S SON PLAYING WITH GOLD
  • Embargoed: 24th December 2009 12:00
  • Keywords:
  • Topics: Economic News
  • Reuters ID: LVA8HPHFQQJQ0TTWWFQ5NH7KGHV0
  • Story Text: With the huge rise in global gold prices, the once bustling Syrian gold jewellery market has suffered a severe setback. Many people now pass by jewellery shops in the famous Damascus market alleyways without even looking at them, shop owners say.
    Gold jewellery traditionally plays an integral role in Syrian social customs, as it does in the rest of the Arab world. A grooms family will pay the bride her dowry in gold jewellery, and gold jewellery is one of the most visible and treasured status symbols in Arab society.
    Damascus is famous in the region for its intricately designed high-quality gold jewellery.
    George Sarji, Head of the Jewellery Committee in Damascus, said business has decreased considerably despite the social traditions.
    "Sure, sales of jewellery have decreased by about 90 percent. I know that from the committee because all the gold that is displayed in the shops of Damascus has to be be stamped by the committee stamp. So I know the percentage that we used to stamp before and now. For example on Monday we had seven boxes compared to 80, 90, 100 boxes. The effect is enormous. Now, just those who really have to are buying gold. Most people have sold their gold," Sarji said.
    Gold prices have been in an overall upward trend since 2001, climbing from just over $250 an ounce that year to a record high above $1,225 an ounce last week, with a weaker tone to the U.S. dollar and a tail-off in supply to the market from central banks supporting the rise.
    High prices have weighed heavily on jewellery demand this year in many major consuming regions such as India and the Middle East, but this slack has been taken up by large investors in Japan, China, the United States and Europe.
    The lack of demand has caused the closure of many of Damascus's gold jewellery shops and ateliers. The Syrian capital used to boast some 600 gold jewellery workshops; now only 200 remain. Many jewellers have changed their career or even left the country.
    Jeweller Hala Khoury, one of the survivors in the Damascus market, says many people now prefer not to buy gold for special occasions because they are afraid of the fluctuating prices. She added:
    "The ateliers have been decreasing and at the same time the workmanship fees have increased. The atmosphere has changed for us. People are afraid now of gold because its prices are one day up and the next day down. We have been affected by this issue."
    Syrian gold jewellery is sought after in the region partly because workmanship fees are among the lowest in the world.
    Damascus jewellers are hoping for a drop in gold prices. In the meantime, some spend their days counting their goods while the rest spend their days just chatting with their colleagues.
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