Gold jewellery demand in the UAE sank to a 20-year low last year, the fourth consecutive annual decline, the World Gold Council said.
Purchases fell 2 percent to 42.8 tons last year, the producer-funded council said Tuesday in an emailed report. The drop occurred even after fourth-quarter demand gained 16 percent as consumers rushed to buy to beat a 5 percent VAT that was imposed in January, it said.
The UAE and Saudi Arabia, the world’s biggest oil exporter, have been squeezed by a fall in crude prices over the past several years.
UAE per capita consumer gold demand dropped from 8.7 grams in 2013 to 4.8 grams in 2017 while Brent crude tumbled over the same period from $108.70 a barrel on average to $54.75, according to data compiled by the council and Bloomberg.
Iran and Kuwait were the only Middle Eastern countries that showed higher gold jewellery demand last year. Even after bar and coin demand in the oil-rich region more than doubled, to 40.5 tons, last year, the market “remains a shadow of its former self,” with average annual demand of about 70 tons in 2007 to 2016, the council said.
Saudi Arabia, the region’s biggest buyer, bought 45.7 tons of gold jewellery last year, down 8 percent, according to the report. Iran came close to beating Saudi Arabia with jewellery demand of 45.4 tons, up 12 percent for the year and the most since 2013, the council said. Demand slowed in the fourth quarter, with a gain of 2 percent, as “worsening U.S.-Iranian relations undermined consumer sentiment,” the council said.
Kuwait’s gold jewellery usage climbed 4 percent to 13 tons, while Egypt’s purchases slumped 14 percent to 22 tons, according to the report.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.