الرئيسية
By Arab News
MAKKAH: A senior official at the Makkah Chamber of Commerce
and Industry (MCCI) has said that investors and employees in the gold
market are the worst affected following a slump in the sale of gold
following a surge in prices in the global market.
“As an outcome of this, many investors are leaving the market and sacking employees,” said Ziyad Farsi, MCCI deputy chairman.
Speaking
to Al-Eqtisadiah business daily, he emphasized the fact that the
investors are left with no other option despite their desire to stay on.
“The steady increase in the prices of the yellow metal over the past
three years has put investors in a precarious position. As a result of
declining sales, many of them incurred huge losses. Some of them
diverted to other projects to save their huge investments in this vital
sector but to no avail,” he said.
Farsi said that sacking of
employees is in accordance with the regulations set by the Ministry of
Labor. “Even though ways of retrenching the workers differ, this is done
in line with the regulations,” he said while noting that the absence of
a unified contract stands in the way of complying with the ministry’s
rules in some cases.
According to Farsi, the global market
witnessed a weekly loss of 3.5 percent last weekend, the worst weekly
loss in the past two months.
However, Farsi said the prices are
expected to surge in the near future because of increased demand from
investors seeking safe haven in the wake of fluctuations in the value of
major currencies. He said any fall in prices of gold in the global
market would be a temporary phenomenon.
The chamber official
ruled out the move by some leading portfolios to sell a portion of their
gold reserve to compensate their losses in the capital market as the
reason for the current fall in gold prices. “These portfolios are very
few in number and they cannot influence the global prices. Most
countries are not ready to sell even a single portion of their gold
reserves,” he said.
According to Farsi, one of the major factors
for a further rise in gold price in the coming year would be the
increase in consumption by China, the most populous country in the
world. China’s consumption of gold is expected to register an increase
of 50 percent, reaching 400 tons during the year 2011 despite Beijing’s
production of 350 tons. This is more significant when compared with the
2010 consumption by China that reached 270 tons.
Farsi said the
global gold market would not witness a correction unless there is a
strong reversion that would continue for a long period. “Such a
reversion is going to happen only in case of another global economic
meltdown,” he said.
Farsi said the Makkah gold market would
continue its slowdown. “The increase in sales during Haj and Umrah
seasons is not sufficient to make up for losses incurred rest of the
year,” he added.
MAKKAH: A senior official at the Makkah Chamber of Commerce
and Industry (MCCI) has said that investors and employees in the gold
market are the worst affected following a slump in the sale of gold
following a surge in prices in the global market.
“As an outcome of this, many investors are leaving the market and sacking employees,” said Ziyad Farsi, MCCI deputy chairman.
Speaking
to Al-Eqtisadiah business daily, he emphasized the fact that the
investors are left with no other option despite their desire to stay on.
“The steady increase in the prices of the yellow metal over the past
three years has put investors in a precarious position. As a result of
declining sales, many of them incurred huge losses. Some of them
diverted to other projects to save their huge investments in this vital
sector but to no avail,” he said.
Farsi said that sacking of
employees is in accordance with the regulations set by the Ministry of
Labor. “Even though ways of retrenching the workers differ, this is done
in line with the regulations,” he said while noting that the absence of
a unified contract stands in the way of complying with the ministry’s
rules in some cases.
According to Farsi, the global market
witnessed a weekly loss of 3.5 percent last weekend, the worst weekly
loss in the past two months.
However, Farsi said the prices are
expected to surge in the near future because of increased demand from
investors seeking safe haven in the wake of fluctuations in the value of
major currencies. He said any fall in prices of gold in the global
market would be a temporary phenomenon.
The chamber official
ruled out the move by some leading portfolios to sell a portion of their
gold reserve to compensate their losses in the capital market as the
reason for the current fall in gold prices. “These portfolios are very
few in number and they cannot influence the global prices. Most
countries are not ready to sell even a single portion of their gold
reserves,” he said.
According to Farsi, one of the major factors
for a further rise in gold price in the coming year would be the
increase in consumption by China, the most populous country in the
world. China’s consumption of gold is expected to register an increase
of 50 percent, reaching 400 tons during the year 2011 despite Beijing’s
production of 350 tons. This is more significant when compared with the
2010 consumption by China that reached 270 tons.
Farsi said the
global gold market would not witness a correction unless there is a
strong reversion that would continue for a long period. “Such a
reversion is going to happen only in case of another global economic
meltdown,” he said.
Farsi said the Makkah gold market would
continue its slowdown. “The increase in sales during Haj and Umrah
seasons is not sufficient to make up for losses incurred rest of the
year,” he added.