UAE retail gold sales soar 21pc
Dubai, November 17, 2007
Retail gold sales in the UAE increased 21 per cent in the third quarter of 2007 compared to the same period in 2006.
Sales figures in the UAE increased from Dh2 billion ($540 million) in the third quarter of 2006 to Dh2.5 billion in the third quarter of 2007, according to figures released by the World Gold Council’s (WGC) regional office in Dubai.
On the other hand, the UAE gold consumption in terms of tonnage increased from 23.9 tonnes in Q3 of 2006 to 26.3 tonnes in the same period of 2007, contributing to a 10 per cent increase.
Demand remained strong throughout the Middle East increasing by 19 per cent in Saudi Arabia, 15 per cent in Egypt and three per cent in other Gulf countries combined. The strong economies in the Arabian Peninsula and a recovering economy in Egypt, together with the favourable price environment for jewellery buying in the first two months of the quarter, easily outweighed the negative impact of the price rise in September.
The WGCl's report revealed that jewellery demand was strong though the quarter, and despite the steep rises in prices which had an impact on key markets, jewellery demand rose in tonnage and value terms.
“It is clear that gold's safe haven and hedging characteristics have been a major attraction to investors during this period of instability, greater inflationary fears and a falling dollar. We are delighted to see overall demand for gold rise very strongly on last year. We also believe that investor interest will remain very strong in the near future and that as the price stabilises, major gold jewellery buying consumers will adapt to a higher floor in the price,' said managing director of WGC in the Middle East, Turkey and Pakistan Moaz Barakat.
A combination of strong economies with rising wealth, favourable price trends for most of the quarter and increased promotional spending, notably by the jewellery trade, were the main factors underlying a 13 per cent increase in consumer demand to 93.2 tonnes in the region as a whole compared to a year earlier (jewellery up 14 per cent, and net retail investment up nine per cent).
The UAE continued to enjoy a booming economy. The Summer Surprises festival was again a success and the number of tourists once again increased sharply, all helping to increase the jewellery demand by 11 per cent and total consumer demand by 10 per cent.
Saudi Arabia also enjoyed an economic boom. Although based on high oil prices, much of the direct impetus to growth is coming from increased government spending on infrastructure and social projects and this is in turn is generating higher incomes throughout the country and thus supporting consumer spending including that on luxury products such as gold jewellery.
The reduction in customs duty on imported jewellery from 12 per cent to five per cent which took effect in March is helping to improve the range of products on offer.
Recovery continued in Egypt with jewellery demand 15 per cent higher than a year earlier. The third quarter jewellery demand was the highest since 2002 in tonnage terms. The country enjoyed a good tourist season during the summer with a number of wealthy Middle East tourists diverted to Egypt from their normal vacation in Lebanon due to the ongoing political tensions. – TradeArabia News Service