Gold regains its lost shine

GOLD traders in Bahrain are weighing in on a rebound in demand that continues to pick up after months of dull business.

There are more than 600 gold shops across the country with over 300 of them located in the capital.

Industry experts are now seeing a gradual flow of customers who are still interested in the yellow metal despite the adverse economic impact of the widespread outbreak of Covid-19.

Hope

“The demand is picking up slowly with 50 per cent of sales reported, which is a good sign,” said GCC Gold, Pearls and Jewellery Association treasurer Mohammed Malim.

“This gives hope to the sector that is being affected along with other businesses due to Covid-19.”

Gold shops along with other non-essential businesses were first shut down from April 9 until 23, and then again from April 23 until May 7.

Mr Malim said traders benefited from the waiver of utility bills and labour fees, along with aid to small jewellery stores through Tamkeen and other measures.

However, he added, 30pc business is reported in the gold jewellery sector, while the sales of bullion have gone up in the past few months.

“We have seen the demand for bullion go up – and expect the sector to rebound in the coming months.”

He said the average turnover per month of the sector in Bahrain was about BD60 million, which is expected to pick up once borders reopen, especially the King Fahad Causeway, which will boost demand.

The pandemic fuelled safe-haven investment demand for gold, with demand, held firm at 1,083.8 tonnes in Q1 2020, a rise of 1pc on the same period last year, according to the World Gold Council’s latest report.

The pandemic has also seen a trend of Indian passengers travelling from Gulf countries, including Bahrain, smuggling gold via chartered flights.

The Indian media reported last month that Customs officials at Kochi Airport, in Kerala state, arrested a woman with nearly 250g of gold, worth more than BD5,000, that was hidden inside her inner wear.

She had reportedly flown in on a chartered flight from Bahrain.

Authorities in India suspected her to be part of a gold smuggling racket and had made frequent international flights.

Smugglers have changed their techniques, hiding gold in date seeds, bra straps, belt buckles, shoe soles and even gold paste.

Earlier this month, Indian Customs officials also “seized a consignment sent from abroad in the name of an official working in the consulate of the UAE in Thiruvananthapuram”.

Suspecting terror links, police arrested several individuals including the two main accused Swapna Suresh and Sandeep Nair in connection with the case where through the diplomatic channel the racket had allegedly smuggled 150kg of gold into India over the past 10 months.

Smuggling

Commenting on the above trend, Mr Malim said the prospect of quick money made some Indian residents in some Gulf countries, especially those who had lost their jobs due to the pandemic, resort to gold smuggling.

“They earn quick money and are willing to take the risk by smuggling gold.

“But in Bahrain there are proper rules and regulations where every gramme is accounted for.”

The GDN contacted the Cochin International Airport Limited regarding the gold smuggling via chartered flights from Gulf countries, but their officials did not respond.

According to reports, in 2016 members of a money-laundering ring used Bahrain as a transit point to smuggle hundreds of thousands of dinars in cash and large amounts of gold between Gulf states.

Three Indians – aged 34, 36 and 41 – were allegedly part of an international racket that smuggled cash obtained from criminal activities and gold, hidden inside vehicles, from Saudi Arabia to Bahrain through the King Fahad Causeway.

They then hid the items in different safe houses around the country before smuggling them into the UAE through Bahrain International Airport.

Source: http://www.gdnonline.com/Details/838013/Gold-regains-its-lost-shine