Sales figures in the UAE increased from 1.1billion Dirham in the fourth quarter of 2005 to 1.7 billion Dirham in the fourth quarter of 2006.
On the other hand, the UAE gold consumption in terms of tonnage increased from 17.6 tonnes in Q4 of 2005 to 19.1 tonnes in the same period of 2006. This increase in gold sales and tonnage is due to the high number of tourists in the UAE during that period, in addition to all the holidays during that time like Eid, Christmas, Diwali and New Year. As price volatility subsided from late August, conditions became better for jewellery demand. It then surged from mid September to late October when the price fell below $600 and remained until the very end of October in the $570-$600 range. This period also saw the run up to both Diwali and Eid al Fitr at the end of Ramadan, both of which occurred almost simultaneously in late October, and which are both strong gold buying occasions. While demand was lower in November, a fall back of the price in December coupled with Christmas and Eid al Adha at the end of the year helped demand recover.
On a yearly basis, gold sales increased by 27% as sales increased from AED 6.4 billion in 2005 to AED 8.1 billion in 2006. Many factors have led to this increase in gold sales in the UAE like the sustained promotions of gold jewellery in UAE and key markets. For example the promotional activities run by the Dubai Gold and Jewellery Group and the Gold Trade along with the World Gold Council in the country in addition to the shopping festivals (Dubai Shopping Festival and Dubai Summer Surprises) is important to ensure rise in gold demand. In addition to the UAE Government’s efforts to promote the country, the Dubai Multi Commodities Centre is continuously enhancing Dubai’s images as the City of Gold.
Commenting on the results in the region, Mr. Moaz Barakat – Managing Director of the World Gold Council in the Middle East, Turkey and Pakistan said:
“The second half of the year viewed more stable gold prices compared to the first half and that resulted in better level of demand. Price volatility in the first half of the year affected the tonnage demand.”
“World gold price volatility has affected the demand as anticipated in the beginning of this quarter, however; demand has increased towards the end of quarter three supported by price stability and consumers have become comfortable with the range of $570 to $600 per ounce.”
Mr. Barakat added: “The positive effect of the marketing and promotional campaigns held by the World Gold Council and its partners from the gold traders in several countries in the region has been very much apparent on gold jewellery demand. This is very much similar to the Council’s role in increasing world retail investment demand through the Gold-backed Exchange traded Funds (ETFs) launched by the Council in several world stock markets.”
This year, 2007, has begun with brisk demand in most jewellery markets, while investor interest has also remained positive. Market research findings show that sentiment towards gold jewellery in key markets remains strong. Prospects for both jewellery and investment demand in the first half of the year are good.
Monday, February 19- 2007 @ 7:40 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.