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MEast Q4 gold demand slumps with jewelry sales - Daily News Egypt

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MEast Q4 gold demand slumps with jewelry sales

DUBAI: Middle East fourth-quarter gold demand fell 32 percent on the year as jewelry sales continued to feel the impact of high prices and the global economic downturn, the World Gold Council said on Wednesday. jewelry demand makes up the bulk of gold consumption in the Middle East, leaving gold sales more sensitive to consumer …


DUBAI: Middle East fourth-quarter gold demand fell 32 percent on the year as jewelry sales continued to feel the impact of high prices and the global economic downturn, the World Gold Council said on Wednesday.

jewelry demand makes up the bulk of gold consumption in the Middle East, leaving gold sales more sensitive to consumer trends than in other parts of the world where investors account for a higher portion of sales.

Egypt and the UAE saw the biggest slump in fourth-quarter jewelry demand, with Egypt falling 35 percent and the UAE 32 percent on the year, the council said. Dubai, which brands itself as the city of gold, has felt the pinch at its gold souks, the council said.

The souks are an attraction for tourists, but the number of holidaymakers in Dubai has dwindled as consumers tightened their belts during the downturn.

Expatriate workers from India, one of the world s biggest gold consumers, were another big buying population in Dubai, but their numbers too have dwindled as hundreds of billions of dollars worth of construction projects have been put on hold.

Jewelry sales in the UAE and Dubai in particular are continuing to suffer under the pressure of future expatriates (in particular Indian workers), the economic downturn and problems in the property sector, the council s report said.

Lower than normal tourist numbers have also continued to impact, although these showed signs of improvement in the latest quarter.

UAE demand falls

Demand in the United Arab Emirates fell 33 percent in full-year 2009, a little higher than the average fall of 31 percent recorded across Gulf Arab states, the council said.

Saudi Arabia, the region s largest gold market, saw 2009 demand drop 24 percent on the year.

Total Middle East gold consumption in 2009 fell 28 percent on the year to 250.6 tons, the council said.

Record international gold prices, driven by investors seeking a safe haven from volatility in other financial markets, have also hit demand.

To encourage cautious investors in the region into gold, the World Gold Council plans to launch two gold investment hedging products this year, one in the UAE and the other in Saudi Arabia, Anan Fakhreddin, managing director of the World Gold Council Middle East and Turkey told reporters in Dubai.

The Saudi product would probably be Shariah-compliant, he said, to encourage investment from those looking for instruments that match Islamic principles, including a prohibition on interest.

The product that will be launched in Saudi will most probably be Islamic and this is all to encourage more investment, he said, declining to give more details about the products.

Topics: FJP

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