IS gold losing its glitter here because of rising prices?

Nine out 10 jewellery retailers The New Paper spoke to at various locations around Singapore said this has not affected sales.

Gold prices hit a new record on Thursday, peaking at US$1,058.58 ($1,470) an ounce (28.35 grams), Reuters reported.

But unlike oil price hikes, which usually result in higher prices at the petrol pump, jewellers here say it does not work that way with gold.

One reason is that the US dollar, with which gold is traded, has weakened against the Singapore dollar.

Mr Muhammad Khan, 42, the general manager at Dinar and Dirham Gold Traders, said: 'When the global prices of gold are converted into Singapore dollars, the rise in the prices of gold here will be more gradual.

The US dollar is worth $1.40 now, compared to $1.52 at the beginning of the year.

Checks with various jewellery retailers show that the price of 916 gold - the most popular category of gold purchase in Singapore - currently ranges between $48 and $53 per gram.

The price, which changes daily, is set by the Singapore Jewellers Association.

Mr Thavachelvan, 42, who works at Arulmani Gold (J) in Little India, said that the price had been hovering around $44 per gram for the past month. It hit $48 at 1pm yesterday, and dropped to $46 two hours later, he added.

In fact, retailers say they actually expect to see a small increase in sales this month despite the price rise.

Ms Clara Foo, 22, a sales assistant at Asian Jewellery in Orchard, said: 'Usually, most of our sales this month will be to the Chinese who are preparing for their wedding. 'This is because this is an auspicious month on the Chinese calendar to get married.'

Ms Deordie Goh, 39, a sales assistant at Ban Cheong Jewellers in Ang Mo Kio, agreed.

'This is the eighth month on the Chinese calendar,' she said.

'Any increase in sales is down to the fact that more Chinese choose to get married now. Most of them buy gold for their wedding and for gifts to friends.'

Even with a drop in sales, one retailer, still does not blame the price hike.

Mr Oh Keng Seng, 45, who works at Chennai Goldsmith & Jewellery in Little India, said: 'The sales at my shop have dropped due to the poor economy rather than escalating gold prices.

'People just lack the cash to buy gold now.'

The one retailer who disagreed that the price hike is not a factor in poor sales is Mr Thavachelvan.

He said: 'Prices for gold per gram has risen from $40 to $48 since last year.

'This year, fewer people are buying gold from me. Many of them are just in here to take a look.'

But Mr Muhammad Khan is optimistic and said any fall is sales is merely temporary.

'The Asian mentality is to buy gold for investment,' he said.

'It is in many Asian cultures to use gold for marriage and dowry, especially the Indians, and hence these group of people will still have to buy gold despite high prices.'

This article was first published in The New Paper.