Jeddah, Asharq Al-Awsat—The Saudi government is taking substantive measures to transform the Kingdom into a regional gold trading hub, according to a number of investors active in the sector.
Speaking to Asharq Al-Awsat, Tariq Feteihy, an investor in the Saudi gold and jewel markets, said government authorities had held meetings during the past few days aimed at boosting the gold industry in the Kingdom by enacting a number of measures including lowering customs duties for exporters and easing visa restrictions for foreign investors looking to enter into the Saudi gold market.
He added that the talks were also aimed at exploring the establishment of a project for joint cooperation between investors and representatives of the gold sub-committees in the Saudi Chamber of Commerce, as well as those within other government bodies.
With 30 billion Saudi riyals’ (8 billion US dollars’) worth of gold traded each year, Saudi Arabia is the fourth-largest market for gold in the world. There are an estimated 6,000 retailers and 250 workshops operating across the Kingdom, with Jeddah and the Holy city of Mecca both considered major trading hubs. Visitors to Mecca for the Hajj pilgrimage will traditionally purchase jewellery and gold to bring back home as gifts to loved ones. This period in the year usually marks a high point for the industry in the country.
Gold market investor Ahmad Al-Kohaji told Asharq Al-Awsat that Saudi Arabia’s transformation into a global market for gold should be modeled along the lines of Dubai, which has transformed itself into the world’s second-largest gold market after London. A total of 75 billion dollars’ worth of gold—or 40 percent of the world’s physical gold traded—changed hands in Dubai during 2013. In 2003 this total amounted to 6 billion dollars.
A recent study by the Kuwaiti Gold Traders Union found that gold markets in the Gulf region were suffering from long government procedures, especially for pricing and customs clearance. This is potentially damaging for traders who weigh and price on the spot, with prices fluctuating in a matter of seconds, the study said.
The price of gold in Saudi Arabia currently stands at 4,873.70 Saudi riyals (1,299.37 dollars) per ounce.