Dubai gold demand low despite price slide
Dubai, April 26, 2008
The gold market in Dubai is faltering because of limited Indian subcontinent import demand and volatile prices, traders in the Gulf Arab emirate known as 'the City of Gold' said on Saturday.
Even though gold prices have dropped to below $900 an ounce recently, key Indian demand for Dubai re-exports has failed to re-emerge.
'Demand is still low even with the current price levels,' one Dubai dealer said. 'It could, however, pick up soon as India enters the peak of the wedding season in May.'
India's gold demand was moderate on Friday as easing prices, down to a fresh three-week low, incurred some buying, and dealers said it could increase for weddings and a festival in the last few weeks of the busy season.
Spot metal fell as low as $877.60 an ounce in Europe on Friday as a sharp drop in a gold-backed exchange-traded fund put a damper on bullion's initial rally on the back of surging crude oil.
The yellow metal was expected to face further downward pressure after falling nearly 15 per cent from last month's record high. Near-term sentiment had also turned bearish since gold broke its 100-day moving average of just above $900 an ounce last week, dealers said.
Dubai's gold jewellery sales volume rose 12 per cent last month and 5 percent in the first quarter of the year as buyers adjusted to current high prices, but traders said the recovery is likely to be short lived if prices remain volatile.
'It is true that lower prices attract buyers, especially after gold hit above $1,000 an ounce before,' a Gulf gold bullion trader said.
'But volatility here is a very important factor, especially when prices drop that much in a few weeks, which may make some think that they could drop much further,' he added.
Dubai is a long-established market for gold bullion and jewellery, wholesale and retail, fuelled by strong demand from the Arab world and India.-Reuters
More Retail & Wholesale Stories
- Sennheiser unveils new microphone system
- Centrepoint opens 100th store in Dubai
- Panasonic to showcase top AV solutions in Dubai
- Alhokair eyes US, UK buys; plans debut sukuk
- 20 countries back Abu Dhabi jewellery show
- SanDisk launches 128GB memory card
- Canon launches 30x zoom PowerShot
- Bin Hindi unveils new 'Twenty20' sales plan
- Nokia tops UAE mobile handsets market
- Spinneys to set up distribution centre at Kizad
- P&G wins product innovation awards
- Xerox names MEA general manager
- India's Bharti group mulls Carrefour tieup
- Etisalat opens retail shop in Dubai Mall
- Ultra wealthy to spend more on luxury goods
- Kuwait group inks JV deal with China jeweller
- MAF in deal to set up retail academy
- Samsung, UPB sign deal to supply AC systems
- Samsung showcases latest UHD monitors
- Unilever named 'employer of choice' in Saudi
- New Nokia Asha range arrives in Bahrain
- Canon launches 2 compact B&W MFPs
- MAF to build new mall in Dubai IMPZ
- Big growth seen for Mideast retail sector
- Rosette, GoExport enter partnership deal
- Samsung opens new outlet in Abu Dhabi
- Epson launches new thermal receipt printer
- Utoor Perfumes signs deal with Mezaj Arabia
- UAE group opens supermarket in Bahrain
- Marks & Spencer opens big store in Kuwait