Gold retail markets take a fall in Abu Dhabi

The gold market in Abu Dhabi has seen a fall of around 70 percent in retail sales during February 2009, as neither the market slowdown nor the gold prices are favouring sales. According to media reports, spot gold traded at about $1,000 an ounce in February, which was for the first time almost in one year. Since then the price has dipped marginally to about $940.

Market experts say it would take sometime before this vicious circle of rising gold prices and market slowdown would break. With the economic situation bleak, gold is being regarded as a safe investment and a cover to bear the economy, which has resulted in gold price escalation, culminating to expensive jewellery quite out of the reach of the reducing disposable income of buyers. Sales could seem to improve is the gold prices reduce but this would be possible maybe in a more stable economy.

The fall in retail sales in the Gulf has been witnessed ever since the beginning of the year, when in January sales were lowered around 70 percent. Credit is difficult to source, hence purchasing power has reduced.