Dubai: Retail gold sales in the UAE increased by 21 per cent in the third quarter of this year compared to the same period of 2006 with jewellery demand remaining strong despite the steep rises in prices. Releasing the third quarter figures in Dubai yesterday, the Dubai office of World Gold Council said sales figures in the UAE increased from Dhs2 billion in the third quarter of 2006 to Dhs2.5 billion in the third quarter of 2007.

"Gold s safe haven and hedging characteristics have been a major attraction to investors during this period of instability, greater inflationary fears and a falling dollar," Moaz Barakat, Managing Director of the WGC in the Middle East, Turkey and Pakistan, said in a statement. "We are delighted to see overall demand for gold rise very strongly on last year. We also believe that investor interest will remain very strong in the near future and that as the price stabilises, major gold jewellery buying consumers will adapt to a higher floor in the price," he said.

UAE gold consumption in terms of tonnage increased from 23.9 tonnes in Q3 of 2006 to 26.3 tonnes in the same period of 2007 contributing to a 10 per cent increase.
Demand remained strong throughout the Middle East increasing by 19 per cent in Saudi Arabia, 15 per cent in Egypt and 3 per cent in other Gulf countries combined. The strong economies in the Arabian Peninsula and a recovering economy in Egypt, together with the favourable price environment for jewellery buying in the first two months of the quarter, easily outweighed the negative impact of the price rise in September.

The WGC s report revealed that jewellery demand was strong through the quarter, and despite the steep rises in prices which had an impact on key markets, jewellery demand rose in tonnage and value terms.

Source : PTI