Summer buying lifts UAE gold sales
Dubai, July 15, 2010
Retail gold demand volumes in Dubai and Abu Dhabi were marginally up in June on the year because expatriates going on holidays had more disposable income to buy jewellery than a year ago, retailers said on Thursday.
"During June and July many people travel for the summer and buy gold as gifts, and this year people had a little more money to spend compared to last year," said Tushar Patni, director of Ajanta Jewellers, one of the largest retailers in Abu Dhabi.
Retail sales represent the bulk of gold demand in the Gulf region because the investment market is in its infancy. There are no official monthly figures in the UAE, and views gathered by Reuters are anecdotal from traders at the gold souks.
Spot gold prices reached around $1,211.45 on Thursday, down from the record high of $1,248.95 hit in mid-May when worries about euro zone debt encouraged investment in gold, seen as a safe-haven asset.
"The prices did come down a little bit which also encouraged people to start buying a little bit more," said a salesman from Hem's Jewellery in Dubai's old gold souk.
After first half of August, retailers expect gold sales to slow down again as Ramadan starts. "The sales during Ramadan are always slow as people focus more on buying food than gold," said Patni.
On the investment side, gold has been a top performer globally as economic uncertainty leads investors to seek the yellow metal as a safe haven.
Gold futures volumes, on the Dubai Gold & Commodities Exchange (DGCX), rose 24 percent in June compared with the previous month.
"In the UAE and the Gulf in general there is an interest from investors to buy gold but there are not enough products out there, so there's a gap in the market that needs to be filled," said Pradeep Unni, senior gold analyst and trader at Richcomm Global Services in Dubai.-Reuters