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Supply Shortage Behind Higher Gold Prices: Jewellers

DUBAI — Gold buyers are not being charged higher prices, jewellers claim, while clarifying they are charging the prices at which gold is being supplied to them.

The market is facing a temporary shortage of gold, and jewellers say it is not because of the festival season.

“This year, our suppliers have not provided the amount of gold we had ordered. Generally, during the festival season, we are geared up for the rush, so the shortage is not associated with it (the festival),” pointed out Cyriac Varghese, general manager of Sky Jewellery.

Sagar Ramesh of KV Jewellers in Sharjah said the high premium at which they have been acquiring gold has caused the temporary shortage. “When the gold rate drops our suppliers increase the premium rates, due to which we can’t buy as much gold,” he said.

The market is currently witnessing a shortage of gold bars, biscuits and coins in particular. “The main shortage is of pure gold, which is quite popular during the festival season. We are expecting import of gold shortly,” said Viswanathan V, store manager of Chungath Jewellers in Bur Dubai.

In order to take the advantage of lower prices, consumers seek direct investment gold in biscuits and bars which fetch more value for money.

“Crafted jewellery is available but people go for gold bars, which increases the demand,” explained Cyriac.

When asked why people have been complaining about the increased prices of gold, Cyriac said, “When a customer comes to us we do not like to turn him down, so we somehow try to get our suppliers to release gold to us. But in this scenario, we are forced to charge a higher amount.”

· afshan@khaleejtimes.com