Dubai gold sales surge 26%

Demand from tourists helps push up sales year-on-year in August; 40% increase expected for September.
Dubai gold sales surge 26%
By Reuters
Sun 16 Sep 2007 11:33 AM

Dubai gold sales rose 26% in value in August year-on-year as demand from tourists increased and the economy improved, an industry executive said on Saturday.

"The market is not affected by the current prices of gold and we have a better economy in Dubai and strong consumer confidence," Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, told Reuters.

"We saw a 26% increase in sales value last month and we could see about 40% increase in September.

Abdullah said he expected about 35% rise in sales value in third quarter of the year and about 40% increase in the fourth quarter as customers raise their purchases in Ramadan and the Dubai Shopping Festival.

Ramadan, which started on September 13, is a month of fasting for devout Muslims and ends with a feast when many couples marry.

Some local traders feared gold sales volume in the UAE could fall by about 10% in volume in 2007, as they did in the previous year due to both volatile and high prices.

But industry executives said the regional appetite for gold remains strong despite the relatively high prices.

Gold rose above $700 an ounce mark this week helped by the faltering dollar to hit a 16-month high of $714.20 on Tuesday before retreating slightly.

Tax-free jewellery in the UAE's gold souks and shopping malls draws Gulf Arab and Western tourists.

Gold sales by the UAE rose 22% in terms of value in the second quarter of 2007 from the year-ago period as demand from tourists increased, the World Gold Council (WGC) said on Wednesday.

Sales value stood at 2.8 billion dirhams ($762.5 million), it said.

Second-quarter demand rose 14.6% to 29.8 tonnes from the same period in 2006, it said in August.

The value of gold sales in Gulf Arab countries is expected to grow 15 to 20% a year as economies expand and tourism grows, the chairman of Dubai Gold and Jewellery Group said in April.

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