Dubai gold sales volume up 17pc

DUBAI — Dubai's gold jewellery sales volume rose 17 per cent in June after picking up in the second quarter on expatriate demand, a senior gold industry executive in the Gulf Arab emirate said yesterday.

By (Reuters)

Published: Tue 8 Jul 2008, 11:32 PM

Last updated: Sun 5 Apr 2015, 12:48 PM

"After prices became less volatile and relatively lower later in the quarter demand picked up by almost 15 per cent, and in June it was up by more than 17 per cent," Tawhid Abdullah, managing-director of the Dubai Gold and Jewellery Group told Reuters.

"We are also entering the peak of summer where demand from expatriates, mainly from India, picks up as they buy gifts crafted in gold for their friends and family back home."

Gold powered to a record of $1,030.80 an ounce on March 17 on record crude oil prices, fears of inflation, and expectations of interest rate cuts in the United States, making the metal more attractive as an alternative investment.

Gold has since fallen and traded around $924 an ounce yesterday as the dollar firmed to a one-week high amid expectations the European Central Bank will not raise interest rates further and oil prices eased more than $2 a barrel.

Declines in sales volume of gold jewellery sales and bullion imports earlier this year deepened anxiety among traders that the emirate may lose its lustre as a regional gold hub.

"Buyers are now used to the idea of gold trading above the $900 level, so we are seeing many more buyers than what we saw in March or even the same period last year," Abdullah said.

Dubai is a long-established market for gold bullion and jewellery — wholesale and retail — fuelled by strong demand from the Arab world and India. Tax-free jewellery in Dubai lures many Gulf Arab and Western tourists.

Traders said India's June to September monsoon season, the prelude to the start of the country's main wedding season, was also boosting demand in Dubai.

The emirate has the highest concentration of jewellery shops in the world, generating trade worth $35 billion last year — 20 per cent of the $173 billion total global jewellery trade.

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