In terms of tonnage, the UAE gold consumption increased from 88 tonnes in 2003 to 96 tonnes in 2004. This nine per cent increase in gold consumption places the UAE as one of the top 10 gold consuming countries in the world. The UAE is not only considered as one of the most consuming countries in relation to gold, it is also the second top import destination of Italian and Turkish gold jewellery after the US.  This performance was not only restricted to the UAE's gold market, but also on the rest of the Gulf as well. The gold consumption in Saudi Arabia increased by 4.5 per cent from 133 tonnes in 2003 to 139 in 2004. The rest of the Gulf's gold consumption increased as well from 52 tonnes in 2003 to 55 tonnes in 2004.

Moaz Barakat, managing director of WGC in the Middle East, Turkey and Pakistan speaking about the increased gold consumption in the UAE and the rest of the Gulf despite the increase in gold price over the year, said that the upward trend in the price does not seem to have deterred jewellery purchasers. Indeed, reports from the main consuming markets indicate that buyers are now accustomed to price in excess of $400 per ounce, and that demonstrated the high affinity to consumers toward gold and gold jewellery.

He said many factors contributed to the improved performance in the gold market like the increase of tourists during the holiday seasons in the UAE where 70 per cent of the UAE tourists visit the gold souk. Another factor is the introduction of gold shopping festivals in countries like Kuwait and Bahrain that boosted the off-take of gold.

He also said that the Dubai Metals and Commodities Centre (DMCC) has enhanced Dubai's images as the City of Gold through establishing a free zone that made Dubai a hub to gold and other precious metals manufacturing and trading. The year 2005 will witness an increase in jewellery manufacturing that will be based mainly in DMCC.

Despite the increase in gold price, the economic and political concerns only had a positive impact on the gold market that increased the retail investment purchases. The investment in gold as a financial asset has increased in-line with the global trend. Early indications for the year 2005 throughout the region are for further strong growth, he added.