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Demand for Gold Increases in Saudi Arabia

Increased demand for pure gold in Saudi Arabia (AFP)
Increased demand for pure gold in Saudi Arabia (AFP)
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Demand for Gold Increases in Saudi Arabia

Increased demand for pure gold in Saudi Arabia (AFP)
Increased demand for pure gold in Saudi Arabia (AFP)

The Saudi gold market is witnessing a stable supply amid increased demand, high market availability, and gold prices moving in unstable ranges due to the Russian-Ukrainian war.

Gold prices in Saudi Arabia returned to their levels three years ago, positively affecting the demand for purchase, especially on pure gold coins and bars, followed by refined gold pieces.

General Director of the Azzouz House for Gold and Jewelry, Mohammed Jamil Hashem Azzouz, told Asharq Al-Awsat that Saudi Arabia was one of the most stable countries during this war.

Azzouz indicated that the national economy proved its ability to face any repercussions and effects resulting from the Ukrainian crisis on the prices of commodities and minerals.

At the beginning of the Russian-Ukrainian war, gold witnessed noticeable declines due to fear and panic, but demand rose slightly, said Azzouz, adding that global prices continued to fluctuate.

In light of the increased demand in Saudi Arabia, Azzouz indicated that the demand percentage for yellow gold of high quality reached 70 percent, pointing out that the northern region is at the forefront in buying for "saving purposes," unlike the rest of the areas that buy gold for "adornment."

The price of a gram of 24 karat gold decreased to SR196.51, compared to SR197.01, while the cost of the most traded 21 karats reached SR171.95, and the gram of 18 karat gold fell to SR147.39 riyals from SR147.76.

The economic price of 14-karat gold reached about SR114.63, compared to SR114.92 on Tuesday, while the cost of 12-karat gold fell to about SR98.26, compared to SR98.51. The price of an ounce of gold was about SR6,112, while the price of a pound of gold of 21 carats amounted to about SR1,376.

Despite the recent fluctuations that swept the world due to the coronavirus pandemic and the Russian-Ukrainian war, Azzouz confirms that demand for gold is still much more potent than jewelry, especially after the concept of saving prevailed in the society.

He explained that gold is essential in times of need and fluctuations, placing the 24-carat coins and pieces at the top of demand in terms of market and savings, especially since any added tax does not cover it.

Azzouz noted that in second place comes golden items such as bracelets and bangles," which are pure without additives and do not carry an enormous manufacturing cost.

According to the Saudi financial system, the official explained that pure gold is not subject to taxes after the Zakat, Tax and Customs Authority exempted imported gold from value-added tax.

Gold is subject to tax at a rate of "zero" if its purity level is 99 percent and is tradable in the global market, while gold with a purity level of less than that is subject to a value-added tax of 15 percent, according to Azzouz.

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France’s Finances to Come under Further Strain Whoever Wins Election

A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
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France’s Finances to Come under Further Strain Whoever Wins Election

A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)

Already under scrutiny from ratings agencies, financial markets and Brussels, France's public finances are likely to come under more strain no matter what the outcome of a snap parliamentary election, which starts with a first round of voting on Sunday.

The main parties have all promised new spending but their plans to pay for it are short on detail and do not always stack up.

Polls indicate that the far-right National Rally (RN) will come first, followed by the New Popular Front left-wing alliance and President Emmanuel Macron's Together trailing in third.

The outgoing government had promised to cut the budget deficit from 5.5% of Gross Domestic Product last year to a European Union ceiling of 3% by 2027 - an objective that may be unattainable after the vote, which concludes with a second round on July 7.

FAR-RIGHT NATIONAL RALLY

If it forms a government, the RN wants as soon as July to cut value added (VAT) sales tax on energy, which it says would cost 7 billion euros for the rest of this year and 12 billion in a full year.

The RN says it would be financed by obtaining a 2-billion-euro rebate on France's EU budget contribution, although the bloc's 2021-27 budget has long since been voted into the books.

The party is counting on big gains from ramping up a levy on exceptional profits from power producers and replacing a tonnage tax on shipowners with normal corporate tax, although that sector's bumper profits of recent years is likely to subside.

The RN also wants to annul a cutback in the duration of unemployment benefits due from in July, a move that the outgoing government says would cost 4 billion euros.

Further out, the RN aims to index pensions to inflation, reduce the retirement age to 60 for people who started work at 20 or before, exempt some workers under the age of 30 from income tax and raise teacher and nurses wages.

It also wants to go ahead with cuts in local business taxes that the current government has had to suspend because they could not be afforded.

The RN would also scrap a 2023 increase in the retirement age to 64 from 62, replacing it with a more progressive system which remains to be specified. The party says it would stick with existing plans to cut the budget deficit in line with France's commitments to EU partners.

Targeting welfare spending on foreign citizens and cutting red tape, the RN has pledged to go head with 20 billion in budget savings this and next year, which the current government has struggled to come up with and detail.

It further wants to renegotiate the European Central Bank's mandate to give it a new focus on jobs, productivity and financing long-term projects.

LEFT-WING NEW POPULAR FRONT

The New Popular Front (NFP) alliance says its first moves would include a 10% civil servant pay hike, providing free school lunches, supplies and transport while raising housing subsidies by 10%.

It says that it can cover the cost by raising 15 billion euros with a tax on superprofits, which remains to be detailed, and reinstating a wealth tax on financial assets, also for 15 billion euros.

Additionally the group wants to freeze prices of basic food items and energy while raising the minimum wage by 14% with subsidies for small firms that cannot otherwise cope.

The alliance would then in 2025 hire more teachers and healthcare workers, step up home insulation with subsidies, boosting public spending by an additional 100 billion euros.

It says the cost would be covered by closing tax loopholes, making income tax much more progressive, restoring the wealth tax on financial assets and setting a maximum inheritance for families of 12 million euros.

From 2026, public spending would reach 150 billion euros annually, notably by increasing the culture and sports ministries' budgets to 1% of GDP.

The NFP would also scrap the 2023 increase in the retirement age and wants to eventually reduce it to 60. The alliance says the extra spending would be financed by tax hikes and stronger growth, but it does not plan to reduce the budget deficit and rejects the EU's fiscal rules.

CENTRIST 'TOGETHER' ALLIANCE

While Macron's party is committed to cutting the budget deficit to 3% of GDP by 2027, institutions from the national auditor to the IMF had serious doubts even before the snap election was called.

Since then, the party has pledged to cut power bills by 15% from 2025 and to match pension hikes to increases in inflation. It says that it will raise public sector wages, but its program does not say by how much.

The party remains committed to no broad tax hikes and will increase the amount parents can gift children tax-free.