The UAE gold sales increased by 56% in the third quarter of the year to reach AED4.3 billion (US$1.17 billion) compared to AED2.8 billion in the same period of the previous year,according to the quarterly Gold Demand Trends report released by the World Gold Council Regional Office in Dubai which reflects record figures for the third quarter of the year, reported the Emirates News Agency WAM.
The same positive sales value increase was recorded in Saudi Arabia as gold sales increased by 51%, 42% in other Gulf countries and 33% in Egypt.
Internationally, the dollar demand for gold reached an all time quarterly record of US$32 billion in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and jewellery buyers returned to the market in droves on a lower gold price.
This figure was 45% higher than the previous record in the second quarter of2 2008. Tonnage demand was also 18% higher than a year earlier.
The gold consumption figures for the world show retail investment demand rising by 121% to 232 tonnes in Q3, with strong bar and coin buying reported in Swiss, German and US markets. The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a haven. Overall, Q3 saw Europe reach an all time record 51 tonnes of bar and coin buying and France became a net investor in gold for the first time since the early 1980s.
Q3 saw a record performance as consumer demand increased for gold jewellery with buyers returning to the markets on lower price points, around and below US$800, demonstrating the underlying positive sentiment towards gold and its recognition as a store value.
Gold’s universal role as a store of value has shone through during this quarter helping attract investors and consumers to all forms of gold ownership. The rise in demand for gold bars and coins has been impressive. Perhaps most encouraging is the return to positive jewellery buying which has been absent for several quarters due to the high levels of price volatility.
Jewellery demand in the Middle East, which accounts for more than 90% of total consumer offtake in the region, rebounded in Q3 after a softer Q2 that was negatively affected by both the high gold price and price volatility.
The UAE and Saudi Arabia were the main drivers of jewellery demand in Q3 in the region with both countries recording growth rates of more than 50% in dollar terms.
Lama Al Saheb, Head of Marketing ‘&’ PR – Middle East Region, commented: ‘Demand for jewellery in the region is influenced by several key factors, price levels and price volatility, as well as key gifting occasions and the advertising campaigns that tend to accompany them. In Dubai, which is the single biggest market in the UAE, the fall in the gold price coincided with the Dubai Summer Surprises.
”Buyers who pulled back in Q2 due to concerns over the high gold price returned to the market. The Dubai Gold and Jewellery Group announced record sales during the DSS festival. The Onam celebrations were also held during the quarter.’ ‘Jewellery demand also benefited from the shortage in bars and coins with consumers choosing to buy jewellery pieces for investment purposes. This shift in demand particularly benefitted low margin and low production cost items such as bangles and chains,’ added Lama.
Looking forward, given the uncertainty that surrounds the global economy, gold’s safe haven appeal should continue.
Gold prices surged Friday, briefly topping US$800 an ounce for the first time in more than a month on safe haven considerations.
Gold for December delivery rallied US$43.10, or 5.8%, to end at US$791.80 an ounce on the Comex division of the New York Mercantile Exchange.