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| Updated: Jan. 30,2006 |
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In the gold market of the United Arab Emirates, gold traders reported that due
to the presently high price of gold, their sales outlook for 2006 are dim.
This means substantially less gold sold than last year. They even reported
people coming into their shops to sell back some gold jewellery they purchased
last year. Just like all commodities, when the price goes up, consumption tends to go down. This is especially so with non essential items, such as jewellery. While Mr. T does not go out without several layers of gold, the average person can take it or leave it. Albeit, gold is a classic statement of wealth and power, has been so since the earliest man discovered how so shape it into a ornament, but as the price increases, it will result is lower sales in the jewellery market. At least for the short term. Long term, some of the market may come back, as income increases, and demand remains strong. Since 85% of gold is used for jewellery, this will impact a large portion of the gold usage. Investors will still speculate, countries will still purchase gold for their portfolios, industry will still use gold, but consumer interest appears to becoming price sensitive around $560/ounce. If major national treasuries purchase gold in large amounts, though, all is out the window. Gold could easily pass the $600/ounce this year, but it does not appear that the amounts to be purchased by national treasuries will be that great, at this early date in the new year. -------------------------------------------------------------------------------- But that's just my opinion. Charles Kubach Mine-Engineer.Com |
