Regional demand boosts Dubai gold imports

The emirate is increasing its gold imports to meet rising demand from Saudi Arabia and Egypt.
Regional demand boosts Dubai gold imports
By Reuters
Sun 10 Jun 2007 12:43 AM

Demand from Saudi Arabia and Egypt is expected to boost Dubai's gold imports in the second quarter, Dubai traders and industry officials said on Saturday.

Dubai is a centre for the import and re-export of gold, bringing in 489 tonnes of gold in 2006 and exporting 274 tonnes, according to the Dubai Multi Commodities Exchange (DMCC).

"Dubai's gold import in the second quarter will be higher than the first quarter of 2007 and higher than the first quarter of last year," said Moaz Barakat, managing director of the World Gold Council in the Middle East, Turkey and Pakistan.

"Demand from countries like Egypt and Saudi Arabia for Dubai gold is increasing and the city is increasing its imports to meet this demand," he told Reuters.

Dubai's first quarter gold imports rose to 132 tonnes, up 14.8 % compared with the same period last year, while exports fell 23.3 % to 66 tonnes, the DMCC said.

Gold demand in Saudi Arabia rose 6.9 % to 26 tonnes in the first quarter of 2007, while in Egypt, the most populous Arab country, it jumped 15.4 % to 15.7 tonnes, the World Gold Council has said.

"Demand for Dubai gold is becoming ... huge and more gold is getting into the city which has succeeded in truly becoming the world's city of gold," said Tawhid Abdullah, managing director of the Gold and Jewellery Group in the Gulf Arab emirate.

Total value of gold traded through the city during the first quarter was $4.080 billion, up from $3.588 billion during the first quarter of last year.

Local traders said that recent high gold prices had not affected the appetite for Dubai's gold.

"People are fine with the current price levels and they do not mind paying more as long as they are getting the best designs and the best quality, which are the traits of Dubai gold," a trader said.

"Countries like Egypt, Saudi Arabia who have historic gold markets, are asking for our gold and many jewellers here have opened shops in these countries."

In Egypt, where residents once considered gold the skin of the gods and lavished it on their ancient pharaohs as they passed to the afterlife, many women only buy Dubai-branded jewellery from small shops on Al-Sagha Street - Cairo's equivalent to Old Bond Street in London.

"Most women here would not like the traditional piece of gold jewellery. We want to wear something fancy, trendy and unusual, which you can find in pieces that come from Dubai," 33-year-old gold shopper Halima Madeh said.

Spot gold bullion peaked at $730 an ounce in May 2006, its highest level since a record peak above $800 in 1980. Prices now stand at around $658 an ounce, a 27 % rise since the start of 2006.

"The market has adjusted to the higher gold price and physical trading is now carrying on the same way as it was at $480 an ounce a year or 18 months ago," Colin Griffith, a senior DMCC official and head of the Dubai Gold and Commodities Exchange, told Reuters.

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