High gold prices weighed on Dubai's gold sales in October, depressing their value by 6% from a year earlier, a top industry executive said on Sunday.
"The market did not look good last month. We had earlier expected a 30% rise in gold sales value, but sales actually dropped 6% compared to October last year," Tawhid Abdullah, Managing Director of the Dubai Gold and Jewellery Group, told Reuters.
"But compared to other markets in the region, a 6% fall is not too bad," he said in a telephone interview.
Gold jumped above $800 per ounce for the first time since 1980 on Friday, boosted by surging oil prices, a record low dollar and more fallout from the global credit market crisis.
Dealers said given current fundamentals, the next big resistance level was $850, a record hit in January 1980.
Dubai, known as the City of Gold, saw the value of gold sales in the third quarter rise 26% from a year earlier, Abdullah said.
Dubai is a long-established market for gold bullion and wholesale and retail jewellery, fuelled by strong demand from the Arab world and India, the world's main gold market.
In the UAE capital Abu Dhabi, a much smaller market than Dubai, gold sale volumes dropped by 15% in October, while the sales value rose 10% on high prices, the emirate's Gold and Jewellery Group chief said on Sunday.
The Muslim holy fasting month of Ramadan ended in mid-October with a feast, during which many couples marry.
"Ramadan helped the sales at the beginning of October, but then sales dropped sharply with the recent price hikes," Abdullah said.
Tax-free jewellery in the UAE's gold souks and shopping malls draws Gulf Arab and Western tourists.
Some local traders feared gold sales volume in the UAE could fall by about 10% in 2007, as they did in the previous year due to high prices.
High gold prices have led to an increase in the flow of scrap gold onto the market in Dubai in recent weeks. (Reuters)For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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