Record Saudi gold prices lead to pawning

Local report says practice is easing strain on cash-strapped Jeddah jewellers.
Record Saudi gold prices lead to pawning
By Ed Attwood
Mon 16 Aug 2010 08:48 AM

Sky-high gold prices over the last few months have forced many jewellers in Jeddah to consider pawning as a way to raise much-need cash.

Arab News reported that there had been an increase in Jeddah traders making the pawning option open to their customers after the gold price reached a record high of $1,248 in May this year.

“There has been a tremendous response from customers looking to buy gold temporarily by paying an amount less than market prices,” jeweller Muhammad Jameel Azouz – also a member for the national committee for precious metals at the Council of Saudi Chambers of Commerce and Industry – told the newspaper.

“This (the high gold price) prompted owners of many jewellers to find alternatives to tackle the slowdown in business. They (jewellers) have to secure licences and sanctions from at least nine government agencies before opening an outlet.”

Some traders are attracting customers with posters in front of their premises, and the newspaper reported that the practice was especially popular with women.

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