Abu Dhabi gold sales volume up 10pc
Reuters
Abu Dhabi gold sales volume rose 10 per cent in July compared to the year-ago period on demand by foreign residents buying gifts ahead of vacations at home.
'Expatriates continued to buy gold jewellery before their holiday, but sales were slowing down by the end of the month as we approached the holiday season,' Tushar Patni, the emirate's Gold and Jewellery Group chairman, said.
'We also had gold prices rising during that period and some buyers were reluctant to pay more,' he said.
In May 2006, spot gold bullion hit a 26-year high at $730 an ounce. It closed at $676.40/677.15 a troy ounce on Friday.
Demand from foreign workers and residents in Abu Dhabi buying gifts to take home during the summer holiday boosted volume since the beginning of May, Patni said.
'August, which is always the slowest month of the year, and September will be a very quiet period. But sales will pick up again in October, especially during the last ten days of the holy month of Ramadan,' Patni said.
The lunar month of Ramadan, which starts around Sept 13, is a month of fasting when devout Muslims refrain from all food, drink or sex during daylight hours. It ends with a feast, when many couples marry.
Labour charges and higher costs of living, which have contributed to higher sales prices for finished pieces, will also affect the market, he said.
The volume of gold sales in Abu Dhabi rose 10 per cent on the year in July, while sales value jumped by 25 per cent during the same period, Patni said.
Tax-free jewellery in the UAE’s gold souks and shopping malls draws GCC and Western tourists.
Some local traders feared gold sales volume in the UAE could fall by about 10 per cent in 2007, as they did in the previous year due to volatility and high prices.
But industry executives have said the regional appetite for gold remains strong despite relatively high prices.
Second-quarter gold demand in the UAE rose almost 14 per cent, while sales value clocked up 25 per cent, Moaz Barakat, managing director of the WGC in the Middle East, Turkey and Pakistan said in July.
The country's total tonnage demand in the first half of 2007 was up by almost 24 per cent, while sales value saw an increase of 27 per cent during the same period, he said.
'There is a great appetite for gold in the region and gold is back in fashion,' he said.
GCC economies grew about 7 per cent in 2006 on high oil revenues, bringing with it increasing appetite for jewellery.