Demand for gold soars amid inflation fears

AMMAN — Local market witnessed a significant increase in demand for gold amid fears of inflation, according to observers. 

Rebhi Allan, president of General Syndicate of Owners of Trade and Jewellery Shops, told The Jordan Times that the market has been witnessing increasing demand for gold, especially gold coins. 

“People usually buy gold coins for investment purposes,” Allan added. 

Meanwhile, economist Wajdi Makhamreh stated that gold is considered a “safe haven currency and an investment for Jordanians”, especially during times of potential economic crisis.

“Inflation and uncertainty in the financial market usually pushes people to invest in gold,” Makhamreh stated. 

Makhamreh highlighted that people usually invest in gold or real estate to preserve the value of their money and also “to preserve the purchasing power of their cash”. 

However, Allan noted that the increase in demand is drawn from the global decrease in gold prices.

Allan and Makhamreh agreed that the wedding season contributed to increasing demand for gold in the local market. 

“The wedding season usually falls during the months of July, August and September,” said Allan.

Makhamreh mentioned that gold is considered a hedge against inflation. Many investors decide to buy gold to protect their capital against value erosion, which arises from an increase in general prices, he added.

According to Allan, selling price of one gramme of 24 karat gold stood at JD40 on Sunday, whereas buying price for 24 karat gold was JD37.10.

Allan stated that gold prices have decreased significantly due to the recent increase in interest rate that US Fed imposed this week.

Gold prices decreased by JD.0.70 for each gramme Allan added.

Allan noted that the market supply is limited due to the decrease in the prices of gold.

A gramme of 21 karat gold was sold for JD33.90 and was bought for JD32.40. Meanwhile, a gramme of 18 karat gold was sold for JD30.30, and was bought for JD27.30 on Sunday, according to Allan.