DOHA 3 July 2013: Gold prices improved marginally on Tuesday from last week’s lows to $1,247 (QR4,540.95) an ounce (31.10g).
But jewellery stores here were quoting gold rates much higher than the international prices.
The price they were quoting on average was QR145 per gramme for 22-carat gold as against the global price of QR134.33.
Jewellery-makers use 22, 21 and 18-carat gold, and not pure gold of 24 carats which, as per international rates, should have been QR146.0012 a gramme.
Jewellers were, though, quoting QR149 on average for pure gold which was only marginally higher than the international rate.
Bullion traders were, on the contrary, following the global prices as the standard 116.64 gramme bar of 24 carats was being yesterday sold for QR17,150 on average (the rate being QR147 per gramme).
Similarly, according to global rates, one gramme of 21-carat gold should have been priced at QR128.48, but jewellery stores here were offering it for QR137.
The 18-carat gold rate was QR118 per gramme as against its global price of QR109.50.
Jewellers argue that their rates are a bit high as they need a margin but critics say they should follow the international market prices as they already levy ‘making charges’ on jewellery.
Even ordinary gold chains that are made locally carry making charges of up to QR7 per gramme, market sources say.
According to them, some jewellery stores charge more for gold per gramme but offer discounts on making charges, thus compensating customers in some way.
Nasir Aslam, from Al Badiya Jewellery in gold souq in Doha, says that some jewellers tend to raise gold rates in tandem raising suspicions of forming a cartel.
He gives what he says is a simple mathematical formula to calculate the prices of 22, 21 and 18-carat gold based on the 24-carat rates (that are easily accessible through the Internet in US dollars). If the international gold rate is $1,247 (QR4,540.95) per ounce, for instance, the price of 24-crarat per gramme works out to QR146.0112.
According to Aslam, once you have the rate of pure gold per gramme, multiply it with 0.920 and you get the rate for 22-carat gold (example: QR146.0112 x 0.920 = QR134.33). Likewise, to get the rate of 21 carats, multiply the pure gold rate per gramme with 0.880 and you get QR128.48, while multiplying it with 0.750 would give you the rate of 18-carat gold (QR109.50). “This is a simple formula and internationally applicable and accepted,” Aslam said.
Whereas the purity of 24-carat gold is 999.9, that of 22-carat is 0.920; of 21 carats 0.880; and of 18 carats 0.750. According to him, bullion traders here do not manipulate gold prices. Bullion traders say their margin on 116.64-gramme bars is about QR100. “But that can be wiped out if gold prices fall, for we follow global rates,” a bullion trader told this newspaper.
Aslam said the state consumer rights watchdog, the Consumer Protection Department (CPD), should monitor gold prices particularly at jewellery stores on a daily basis.
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