‘Severe recession’ in Sudan’s gold market

Gold, one of the important commodities relied upon by the Sudanese economy, has not been spared by the “spectre” of recession and weakened purchasing power in Sudan. According to gold traders in Khartoum, the gold market is witnessing a severe recession in spite of the decline of selling prices by an estimated 10 percent during the past few months. Merchant Mohamed Hussein Abdu recounted that the price of gold in the past few years witnessed price rises by about 30 percent. In 2013 prices of all varieties of gold went down by about 10 percent, as a result of the overall recession and the ensuing weak purchasing power, Abdu explained. The trader said that “Saudi gold of 21 carat” was selling at prices ranging between SDG330-340 ($58-60), while it is now selling for SDG300 ($53). The Bahrain variety of 21 carat dropped from SDG350-360 ($61-63) to SDG320 ($56). Abdu explained that the decline in gold prices occurred as a result of the policies pursued by the Central Bank of Sudan in adjusting the gold prices to the value on the global market where the gold price declined too during the last months, in addition to the decreased purchasing power of the Sudanese. Gold merchant El Rashid noted that the gold prices in Sudan are now less than the world prices. “The Central Bank buys gold for SDG270 per gram, while the price on the global market is SDG290. Thus the price difference between us and the global stock market has become SDG20 ($3.50). El Rashid added that the high dollar rate against the pound has led to weak purchasing power in general. “Gold is considered a luxury item which has now become too costly for the citizens. They have become reluctant to buy gold which in turn affected us as traders. Many have left the gold trade owing to a huge loss of capital.” (Source: Mohanad El Bakri/Akhbar El Youm) File photo: President Omar Al Bashir opens a gold refinery in Khartoum, September 2012 (Reuters)Related: US Dollar price rises on Sudan’s black market (5 January 2014)