Sour gold

RIYADH, Saudi Arabia (AP) - Abdul-Rahman al-Nasser owns a gold store with case after case of glittering necklaces, earrings and bracelets. All it lacks is customers. Shoppers are buying just one set of gold for weddings these days, instead of at least two for the bride and another for the future mother-in-law. The sets are now much lighter in weight. And few people are buying gold for other occasions.

As the price of gold has soared, people have felt its pinch across the Arab world, from Riyadh's Thaiba gold market to ancient and modern gold souks. Gold in this region is not a luxury but a part of the culture, so its rise in price has triggered changes in tradition that could not have been imagined before.

Some Arabs are switching to silver, long disdained as a cheap alternative. Brides are renting - instead of buying - gold jewellery for the wedding ceremony. Mobile phones and perfume have replaced gold as favoured gifts. And some gold shop owners, many of whom have seen sales go down by more than 50 percent, are seriously thinking of changing jobs.

"My neighbour who sells falafel makes more money than I make now," complained jeweller Amer Khoury, 49, in Damascus, Syria.

Gold prices have surged since late last year partly because of demand from investors spooked by the weak U.S. dollar, fears of a recession and record crude-oil prices. Gold set a record of US$1,038.60 an ounce on March 17, although it has fallen slightly since. Several analysts have predicted US$2,000 gold ahead, as a global commodities boom pushes the price of raw materials further into record territory.

The price of gold is changing customs for some not just in the Arab world but also in Asian countries such as India, the world's largest gold consumer. At the Zhaveri Bazar, the gold hub of the Indian city of Mumbai, jeweller Dayaram Kanti said women prefer to exchange their old gold sets for newer jewellery and pay the price difference rather than buy new gold jewellery.

"Earlier our gold gift sales for Valentine's and Christmas or Hindu festivals was good. You would get a decent set of earrings for 1,000 rupees (US$23; euro15)," Kanti said. "Now it will be so tiny it's better to give cash as the gift."

Gold in India is so deeply tied into the culture that sometimes people make provisions in wills to give gold to yet unborn grandchildren. Similarly, in the Arab world, babies are showered with gold from the moment they are born. Tiny crosses or verses from the Quran are pinned to their clothes, and gold ornaments are given for birthdays, Mother's Day and Valentine's Day.

However, the rising price of gold has coincided with high inflation in Arab countries and, in some cases, crashes in the stock market."Our sales are seriously down, up to 70 percent down compared to two or three years ago," said Sami Haddad, 48, a gold shop owner in the oil-rich emirate of Kuwait. "More than 25 percent (of clients) leave the shop without buying anything and tell me they will ... wait till prices go down."

Demand for gold jewellery in the Middle East fell 19 percent in the first quarter of 2008, compared to the same period last year, according to the World Gold Council. The council said the drop was mainly due to high gold prices, although a minor reason was that the Eid al Adha festival fell at the beginning of 2007 by the Islamic calendar.

Those who buy get less for their money. Last year, Lina al-Masri spent US$200 (euro130) to buy one daughter an 11-gram (0.4-ounce) gold bracelet. This time, the 59-year-old Syrian housewife paid US$173 (euro112) for a 6-gram (0.2-ounce) pair of earrings for another daughter.

The toll of gold prices is perhaps highest at weddings. A bride's shabka - jewellery paid for with part of the dowry from the groom - has always been a must. These days, however, not every man can afford it. Rami Maath, a 31-year-old Syrian executive, said high gold prices are "driving him crazy." His wedding is in two months, and he has bought his fiancee only an engagement ring for US$152 (euro99).

Maath, who makes US$750 (euro487) a month, has put aside another US$550 (euro357) for the shabka. But that won't get him a proper set - a necklace with matching earrings and a bracelet."It's just my bad luck that gold prices have gone up before my wedding," said Farah Maasarani, 25, Maath's fiancee.

Jordanian government worker Soha Shahin, 24, earns US$250 (euro162) a month, and her fiance is a court clerk who earns much the same. She said they will skip buying her shabka until gold prices go down. Instead, she plans to buy a small gold piece, like a wedding ring.

If gold prices stay high, she may rent jewellery for her June 19 wedding party. If the shops won't rent out gold, she will borrow from her mom and other relatives."I just can't go to the wedding party not wearing gold," said Shahin. At a silver jewellery store on Beirut's Hamra Street, prominent signs in the window say "Silver," next to imitations of elaborate gold sets. Store workers don't want customers to think the jewellery is white gold.

"We don't want to scare them away," said saleswoman Iman Masri. Masri said business has gone up about 60 percent since gold prices began to climb. A silver wedding set at the store costs less than US$1,000 (euro650), a fraction of what a bride would pay for a gold set.

But silver is still a no-no in much of the Arab world. Ali Sergany, owner of the Sergany jewellery chain in Egypt, said Egyptian customers refuse to buy either silver or gold of anything less than 18 carats."No bride would accept to have her shabka in silver," he said. "No way."