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Saudis, Russians No Longer Buying Gold In Dubai As Oil Slump Curbs Precious Metals Shopping
Over the course of the oil price slump we’ve documented the far-reaching effects of falling crude. Leaving aside the capital markets for now, the downturn has rippled through oil boom towns both in the US and Canada. Take Fort McMurray (in oil-rich Alberta) for instance, where home sales fell 66% in February or Sidney, Montana where the collapse in oil revenue has left law enforcement and schools strapped for cash in the face of rising crime and crumbling infrastructure. Then there is of course Texas which, until recently, was America’s job creation engine but which shed a recession-like 24,500 non-farm jobs in March alone.
Blue collar workers in North America aren’t the only one’s feeling the pain however. Sliding crude has also taken its toll on precious metals vendors in Dubai whose customer base is drying up now that fewer Saudis and Russians are going on gold shopping sprees in the country’s Dubai Gold Souk marketplace.
Here’s Bloomberg:
Under streets and alleys covered by roofs to protect window shoppers from the intense desert sun, more than 300 stores peddle everything from ingots to Bedouin jewelry. The Dubai Gold Souk had become one of the largest such marketplaces, offering tax-free precious metal, as Persian Gulf oil wealth ballooned in the past few decades.
Now, with the plunge in crude throttling economies across the Middle East, gold buyers are harder to find. Demand for the metal is slowing in the region and Dubai has seen a drop-off in some visitors. Shopkeepers say sales are declining because tourists from Saudi Arabia and Russia have less cash to spend. Sellers offer discounts for gold that two years ago fetched a premium.
“The market is dead,” Jeffrey Rhodes, who has spent 27 years in Dubai’s gold industry and founded Rhodes Precious Metals Consultancy DMCC, said by telephone on April 21. “There’s no real demand here”...
Even with fewer shoppers in the market, which rose to prominence in the 1940s and is spaced across two buildings as high as six floors, Dubai is still a major trading hub. The weight of all the gold jewelry on display comes to about 25 metric tons, the same as five Indian elephants, according to an association representing the vendors.
Shopping trips from the Middle East “are fewer and shorter, and they spend less,” Gerhard Schubert, founder of Schubert Commodities Consultancy DMCC and a member of the Dubai Multi Commodities Centre’s responsible sourcing committee, said by telephone from Dubai on April 28. “This will be even worse after Ramadan, during the Eid holiday when you normally have a million Saudis coming over. I’m sure the numbers will be down this year”...
“We are still surviving, but everyone is worried about the future.”
Yes, everyone is worried about the future for all of the poor souls who can now only afford to go tax-free gold shopping in Dubai four times a year as opposed to say six times, but who knows, with the US Navy now escorting US flagged cargo ships through the Strait Of Hormuz (as a precautionary measure of course), one errant pot shot across the bow could be just what the doctor ordered for still-depressed crude prices and by extension, for the poor gold vendors of Dubai.
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China's domestic market in 2015 has been pulling 50 tonnes per week out of the Shanghai Gold Exchange.
https://www.bullionstar.com/blogs/koos-jansen/thoughts-on-the-price-of-gold/
Now see what is happening on the International Board in the Shanghai Free Trade Zone:
https://www.bullionstar.com/blogs/koos-jansen/shanghai-international-gold-exchange-comes-to-life/
Prediction: some is buying oil with gold.
Gold is only valuble because the ancients needed it for their advanced technologies. We no longer have those technologies so it became a barbaric relic.
What total fucking horse shit.
One assumes that this is sarcasm yes...
It was bait, attractive bait it seems.
Ben, that's you?
all markets are eventually brought to physical when debt gets inflated to zero to save insiders holdings while other creditors get blown out in actual defaults.
what's left is a physical market in land, food, real equity ownership of dividends, gold etc....
prices go up because supplies go down when the market clears. it's not because money is printed forever its because money is forever printed. sounds deep but actually it makes zero cents. but it does sound deep and cool.
Yeah, this smells like the wealthy playing a game of dupe the masses....
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edit
"Fuck you, Bloomberg!!"
Easy there. Bloomy is one of your future leader after the FED engineered collapse, you will have to beg him to get a few calories for a weeks work at one of his data mines.
Now apologize and be nice.
Zero must equal 100%. Good Luck.
As a rule of thumb, oil is relatively expensive (and gold is relatively inexpensive) when the ratio is below 9, and oil is relatively inexpensive (and gold is relatively expensive) when the ratio is above 20...
http://www.zerohedge.com/news/2014-12-18/what-gold-oil-ratio-telling-us
any of you goldbugs want to do the math for me? Buehler? Buehler?
lol saw that last week, a bearish gold article on zh who'd have thought?
i love trolling the goldbugs. they have no sense of humor whatsoever. let the downvoting commence with all due haste!
This chart is pretty good on that subject too:
http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart
History shows a tanking in the ratio at or above these levels, whether that means oil goes up or gold goes down but one of them gives.
Yeah but king dollar.
HA! AHAHAHAHAHAHAHAHAHAHAHAHAHA!
Got my hands full with the warhawk xenophobes of the butthurt brigade, every post with less than ten downvotes is considered a misfire. Been pretty accurate lately.
I am Freddie Gray.
WHAT?!
Been telling the oil haters on this board that since oil started dropping. If oil doesn't go back up, it's bad news for gold, they might be getting it now. However, oil had a good April and May looks to do the same with $75 in view by June. Gold may follow if oil keeps moving up.
what do saudis, russians, and jango have in common?
They are all Fett up with everything going on.
Does this mean we should short Tiffany's stock tomorrow...
You should have shorted TIF 6 months ago.
Maybe gold buyers are drying up in the middle east, but, as Bloomberg noted earlier this month, Russia increased foreign reserves of gold bullion to 39.8 million ounces, or about 1,238 metric tons, as of April 1, compared with 38.8 million ounces a month earlier, the central bank said on its website Monday. The 30-ton purchase was the most since September.
The Ponzi Casino, like the Fun-house Mirrors, can create all sorts of aberrations.
When use use Elastic Money (an elastic ruler, i.e. a Bungee), you can distort and pervert anything of value, to suit your goals or desires.
The ONLY counter-move is to... LEAVE THE FUN-HOUSE/CASINO! Else, live by its rules and consequences.
As long as the BRICS refuse to or delay backing their currencies with gold, they are deluding themselves and deceiving their people. The TRUE allegiance of a CB is in what it does, not in what it says. Is its allegiance to the country? If so, they'll use gold. Else their allegiance lies with the Club/Cabal of Globalist Banksters, and they'll choose fiat.
It's that simple, and there is no Door#3.
You forgot to mention fiat will fail and in the end who ever is holding it fails too.
It's just going to shift to digital currency dude, it's a war on cash, but I'd expect gold confiscation along with gun confiscation soon....
https://youtu.be/uhiCFdWeQfA
Saudis burning through foreign exchange reserves.
http://www.ft.com/intl/cms/s/0/01948d2c-ef49-11e4-a6d2-00144feab7de.html...
Not that I believe the Red Shield Financial Times but the House of Saud is in trouble. They are total scum. At least I have a reason to respect the Persians (Iran). The f**king dual shitizen House of Saud are bagel merchants from Iraq before Mi6 installed them with Lawrence of Arabia. The Red Shield's Mi6 man in Arabia.
They're all shit heads and they're all dead broke.
Let's not forget to mention oil exporters can't afford to invest in USTs and dollars either.
They used to buy gold with oil. Now they buy oil with gold.
Stack me
Now the plan is clear
Saudis will weaken, then become like Iraq
The America will raid & loot all Saudi gold
to boost American economy.
=======
Its the same plan the pirate western countries employed , for centuries :
"Let them sell their products , they get rich , they accumulate gold, then raid it , and loot all their gold, hah ha , we get their products , & we get their gold too, them , they only get poverty , debt , hunger & wars"
what sort of rates are they asking for kilo bars in Dubai? might be worth the trip...
is it tax free arriving back here as well?
Riyadh is building a $22.5 billion metro, 109 miles of subway where you can't tunnel - Riyadh is built on sand.
Nonsense. Analgous to slump in Apple sales in Whitter, California.
could have something to do with Saudis fighting they're own war for a change.
btw, didn't they flood the market with oil in the first place? guess it sorta backfired.Yuri