The rising prices of gold during the past two weeks caused stagnation in the Saudi market, and pushed gold merchants to activate sales because factories didn’t halt their production, according to the National Committee for Precious Metals.
The price of the precious metal has registered the second weekly decline, while the dollar has recovered from its lowest value since seven weeks ago.
Speculation about the US Federal Reserve to reduce the bonds purchase program with a value of $85 billion a month was triggered by the low price of gold, which reached its lowest levels this week.
“Gold merchants didn’t lose because of the declining world prices, because most of them deal with gold as physical balance, and most merchants have sufficient gold accounts,” said Ahmad Al-Sharif, member of the National Committee for Precious Metals.
Gold prices declined by 0.2 percent, to $1,308 per ounce, and the market is about to close at 0.25 percent. Delayed US gold contracts, which will be delivered in December declined by $2, to $1,307.90 per ounce.
Silver prices stabilized at $20.19 per ounce, while platinum gained 0.1 percent to $1,488 per ounce. Palladium rose 0.1 percent to $736.97 per ounce.
Meanwhile, the National Committee for Precious Metals is attempting to ferret out illegal gold sellers, which had controlled as much as one-quarter of the gold market.
“Workshops have been organized, which held unknown names in the gold trade, or operated from places that didn’t have defined headquarters contained products with ambiguous origins were combated,” said Al-Sharif. “We are working on a mechanism to combat violating workshops, and educate consumers and merchants who deal with such workshops. We advise merchants, and gold market clients to buy gold from approved individuals.”
He pointed to the existence of “workshops alien to the market” that had a large share before prices rose, which control 25 percent of the market.
“After the rising prices a large number of these workshops sold their stocks and changed their activities because they were illegal dealers,” he said. “After strict controls and the correction of labor status these violating workshops will be eliminated, because most of them are illegal workers who practice their business in un licensed areas.”
“At the present time, and because of the strict control of the Passport Department and the Ministry of Labor, these workshops have 10 percent of the market share,” he said.