More sellers than buyers in Benghazi gold bazaar

Reuters, Sunday 24 Apr 2011

Rising price of gold and no security makes for a quiet gold market

Photo: Reuters

Crowds used to cram into Benghazi's downtown gold market to browse the glittering wares. Two months into Libya's revolt, the covered souk is almost empty, and the few customers that turn up are mostly there to sell, not to buy.

Some adventurous shopkeepers have started to reopen stalls, but many others are keeping theirs shuttered. The few customers are greeted by a mournful collection of bare mannequins and empty glass display cases.

"More people are selling gold than buying it right now," said Faraj el-Matuny, 23, sitting in his family jewelry shop. "People are short on money."

Abdelqader el-Sherif, a 43-year-old oil company worker, said he came to sell his mother's bracelets to help provide for his large family.

"We're hesitant to do this, but there's no choice now. We have to sell it," he said, handing the jewelry over to a shopkeeper, who inspected it with a magnifying eyepiece and rang up the price on a calculator.

Vendors said they feared thieves might consider the gold bazaar an obvious target in a city where few police are on duty and many residents have taken guns from abandoned government armouries. Some stores have shut down for good.

"The situation needs to calm down a little. After we get rid of Muammar we'll put the gold back," Hussein el-Sheiby, 32, said as he sat in his jewelry store, where many cases lay empty.

Sheiby said he closed his shop during the height of the violence in Benghazi, where the revolt against Muammar Gaddafi's four-decade rule began in earnest on 17 February. Rebels estimate more than 300 people died in the eastern city during the uprising's early days.

Business has begun to improve, Sheiby said, and customers are gradually returning to his store.

Residents in Libya's rebel-held east are receiving salaries of up to 700 Libyan dinars per month, but a weakening of the Libyan currency means the amount does not go as far as it used to.

Money lenders standing around the gold market's open-air courtyard with wads of fresh notes said 100 U.S. dollars now buys 180 dinars, up from 125 dinars before the revolt.

The falling currency has fueled some rumours of gold hoarding in the rebel stronghold, although vendors mostly said buyers were still largely young men and women shopping for weddings and other occasions.


The price of gold has gone up quickly. Storekeepers said they were now paying about 63 dinars per gram, up from around 43 dinars per gram before the crisis. They sell gold for about 80 dinars a gram, up from about 60 dinars.

Many vendors said they imported jewelry from Italy, as well as higher-grade gold from Gulf Arab states, and that it was harder to get new shipments now.

The revolt in Libya is one of the factors that has driven up the price of gold around the globe. World gold prices powered to a lifetime high for a fifth consecutive session on Thursday.

Some Benghazi jewelry vendors have taken the cue to exit the business altogether.

"There are some people who got frightened, and some sold their gold and left the business. The price has gone up a lot, so it's a good chance," 29 year old Omar Bishary said as he sat in his family's store.
Outside, men loitered outside shops, smoking cigarettes and drinking tea as they waited for more customers to arrive.

"Most of the stores are closed now. Some of the storekeepers are crazy, though. If they're crazy, they keep the shops open," one bearded vendor said as he stood outside his nearly-empty store. "Me? I'm crazy."

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