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Sun 27 May 2007 12:48 AM

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Dubai gold sales up as prices stabilise

Official says appetite for gold remains strong as sales rise 32% year on year.

Dubai gold sales rose 32 % in value in April from the same month a year earlier as prices stabilised, a top Dubai Gold and Jewellery Group official said on Saturday, without giving a figure for the change in volume.

"April was a very positive month. Gold sales were up 32 % compared with the same period last year as more customers upped their purchases after prices stabilised," Tawhid Abdullah, managing director of the Gold and Jewellery Group in the Gulf Arab emirate, told Reuters.

"Dubai gold market is more and more positioning itself as the centre of the Middle East."

First-quarter demand in the United Arab Emirates, a federation of seven emirates including trade hub Dubai and oil-rich Abu Dhabi, rose 5.7 % to 29.7 tonnes while sales jumped 23.9 % to $741 million, the World Gold Council has said in a report.

Abu Dhabi gold sales rose about 10 % in volume in April from the same month the year before, while sales value jumped 17 % during the same period.

Abdullah said second-quarter sales could see an increase of about 30 % in value.

Some local traders have said gold sales in the UAE could fall by about 10 % in volume for the second consecutive year in 2007 due to price volatility.

But Abdullah said the market in Dubai had not been affected by the price movement and there was still an appetite for the precious metal.

Spot gold bullion peaked at $730 an ounce in May 2006, its highest level since a record peak above $800 in 1980.

Dubai is one of the world's top gold consuming regions and a major hub of the physical gold trade in the Middle East and Asia.

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

The region's economies grew about 7 % in 2006, driven by high oil prices, increasing the appetite for jewellery.

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