Drop in gold prices unlikely to spur local demand — jewellers

AMMAN — The current drop in gold prices —at its lowest globally since 2010 — is unlikely to spur Jordanians' demand for the precious metal, an informed source said Thursday.

Gold prices dropped to $1,064.55 per ounce on November 18, the lowest level since February 2010, according to Bloomberg.

"Demand on gold is usually flexible and has an inverse correlation with prices, but the fact that the decline was not sudden means it is unlikely to affect Jordanians' demand for gold," Jordan Jewellers Association (JIA) President Osama Imseeh told The Jordan Times.

He noted that the drop in prices witnessed in August and September of this year led to an increase in demand.

"The same happened two years ago… we were lucky back then, but now with the summer occasions and expatriates' visiting season both over, the demand on gold is very low," Imseeh noted.

He expected a further drop in global prices of gold.

Gold prices dropped on Wednesday, hovering just above the lowest level in nearly six years on pressure from a rebounding dollar after strong US economic data heightened expectations of an interest rate hike from the Federal Reserve next month, according to Reuters.

The Economist also attributes the immediate reason for gold's woes to the "strong" dollar, explaining that gold is priced in dollars, so if the American currency goes up, investors mark down the yellow metal accordingly.

As shown by the JIA, on November 18 sale and purchase prices for 24-karat gold were JD27.100 and JD24.400 per gramme; JD22.100 and JD20.800 for 21-karat; and JD19.100 and JD17.300 for 18-karat.