- Title: JORDAN: Jordanian gold industry hit hard by high prices
- Date: 5th June 2008
- Summary: PAN: INTERIOR OF IMSEEH JEWELLERY SHOP VARIOUS OF GOLD NECKLACES (3 SHOTS)
- Embargoed: 20th June 2008 13:00
- Keywords:
- Location: Jordan
- Country: Jordan
- Topics: Industry
- Reuters ID: LVA6RV3PJ3QDHAM977C8DNK2JHOF
- Story Text: Gold may be losing its appeal among jewellery-loving Jordanians after prices for the precious metal struck record highs in March and persist at historically high levels.
As global gold prices continue at high levels, Jordanian consumers are keeping away from the popular precious metal, prompting painful market adjustments.
Gold has lost more than 14 percent in value since rising to an all time high of 1,030.80 U.S. dollars an ounce in mid-March, but prices remain at historically high levels.
Marwan Abboud, a jewellery manufacturer in Amman, says many workshops have had to cut employee salaries to keep prices affordable to customers.
Others have simply gone out of business.
"The price of gold is going up, we are trying to lower wages to help people buy. This is a problem for craftsmen because we are decreasing wages while everything around us is becoming more expensive. So it is having a big impact on the industry," Abboud told Reuters.
Some 50 percent of gold workshops in Jordan have shut down over the past five years, and this figure is likely to rise if prices do not stabilise.
The hike has also deterred Jordanians from investing in gold, and local demand for the commodity has decreased by up to seventy percent, jewellers in Amman estimate.
Indeed even in the Arab Gulf, the region's largest gold consumer, women, traditionally avid buyers of high quality, heavy gold jewellery, are shifting to the relatively affordable 18 carat alloy, used often in western designer pieces.
Gold is of great cultural significance in Arab countries, regarded as financial security and a vital part of their weddings.
Some even worry gold prices are affecting peoples' decisions to get married.
"It is a proportional equation. As the price of gold increases, the price of everything else is going up with it and a lot of things will become impossible to purchase. Marriage rates are going to go down. I don't want to blame it all on gold prices, a lot of things are becoming more expensive, but gold is a necessity for people who want to get engaged or married. It is a basic commodity for people who want to get married," said Fahd Benyan, who was shopping in the Amman gold market for his fiance.
The country's 700 gold manufacturers are hoping they can weather the current fluctuations through innovative designs.
Many are incorporating more precious and semi-precious stones into their products and minimising the use of gold to encourage jewellery spending.
"There is a shift in local demand from gold to diamonds and precious stones because when they are incorporated into the piece, the gold weighs less. That way you are buying diamonds with same budget but better value without feeling that it is too expensive. Instead of buying bridal gold jewellery weighing 100 to 150 grammes, I can buy a smaller one containing diamonds within the same budget, which is more prestigious," Osama Imseeh, head of Goldsmiths Union and partial owner of Imseeh Jewellery said.
"Another emerging trend is hollow gold items, which provides a bulky exterior. It is hollow but ensures satisfaction by being well-designed but weighing less, such as chain-like designs or the inclusion of precious and semi-precious stones. Customers like to renew their jewellery collection every year, and they're not going to be purchases old designs," Imseeh added.
Spot gold fell to 879.20 USD an ounce from 882.90/884.10 USD an ounce late in New York on Tuesday (June 03), when it dropped almost 1 percent. - Copyright Holder: REUTERS
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