More sellers than buyers in Benghazi gold market

Two months into Libya’s revolt against Muammar Qaddafi’s autocratic rule, Benghazi's downtown gold market is almost empty and the few customers who turn up are mostly there to sell, not to buy. Crowds used to cram into the covered souk to browse the glittering wares not so long ago.

Some adventurous shopkeepers have started to reopen stalls, but many others are keeping their shops 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 al-Matuny, 23, sitting in his family jewelry shop. “People are short on money,” he told Reuters.

Abdelqader al-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 armories. Some stores have shut down for good.

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

Mr. Sheiby said he closed his shop during the height of the violence in Benghazi, where the revolt against Libyan leader Qaddafi’s four-decade rule began in earnest on February 17. Protesters estimate more than 300 people died in the eastern city during the uprising’s early days.

Benghazi is the second largest city in Libya with a population of around 1.5 million out of Libya's total population of 5.5 million.

Business has begun to improve, Mr. Sheiby told Reuters, and customers are gradually returning to his store. Residents in Libya’s opposition-held east are receiving salaries of up to 700 Libyan dinars ($589.7) per month, but a weakening of the Libyan currency means the amount does not go as far as it used to.

Moneylenders standing around the gold market’s open-air courtyard with wads of fresh notes said $100 now buys 180 dinars, up from 125 dinars before the revolt.

The falling currency has fueled some rumors of gold hoarding in the rebel stronghold, although souk 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. 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 have driven up the price of gold around the globe. World gold prices powered to $1,507 an ounce on Friday.

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,” said 29-year-old Omar Bishary 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.”

(Abeer Tayel of Al Arabiya can be reached via email at: [email protected])