Demand for gold bars and coins up 12% while jewellery sales decline 24% y-o-y in Q3
With gold prices remaining extremely volatile over the past
few months, investment demand for gold has taken off even as jewellery
sales remain subdued.
According to World Gold Council data, customers in the UAE are
according more attention to gold as an investment option, with demand
for gold bars and coins in the country rising 12 per cent year-on-year
in the third quarter of 2011 even as demand for jewellery plunged 24 per
cent during the same period.
The increase in gold as an investment has been a constant feature in
UAE’s demand trends this year, with demand for gold bars and coins
rising 21 and 6 per cent y-o-y in the year’s first and second quarters,
respectively. In contrast, demand for jewellery rose 5 per cent in the
first quarter but declined 1 per cent in the subsequent quarter.
Overall, UAE’s investment demand for gold (in terms of gold bars and
coins sale in tonnes) is up more than 12 per cent in the three quarters
this year compared with the same period of 2010, while jewellery demand
is down by 5.25 per cent (in tonnes) during the same period.
It must be recalled that gold made its all-time high of $1,920.30 per
ounce on September 6, but has since declined and is currently trading
at around $1,700/oz levels. Anecdotal evidence suggests that while
jewellery demand is back on track in the ongoing quarter, investment
demand has accelerated further as customers seem to believe that the
current decline in gold prices is temporary.
“Traditionally, we have more women customers at our outlets,” said
the manager of a large gold retailer’s outlet in Dubai’s Mall of the
Emirates, who requested anonymity as he is not authorized to talk to the
media.
“Men of course accompany their wives or other women relatives,
and basically assist in the decision-making and payment process,” he
said.
“In the past few months, however, I have noticed an increasing number
of men walk in, without their spouses, and enquire about current gold
rates and eventually buy gold bars or coins,” he said.
Trends in the UAE are in line with global patterns, with worldwide
jewellery demand falling 10 per cent in the most recent quarter, while
investment demand for bars and coins surged 29 per cent.
Globally, gold sales in the third quarter of 2011 rose 6 per cent
year-on-year to 1,054 tonnes, worth a record $57.7 billion, data shows.
The World Gold Council attributed this increase, despite record prices,
to an unprecedented rise in investment demand.
“A strong rise in investment demand drove the growth in overall
demand, as investors across the globe sought to protect their wealth,
diversify their risk and benefit from gold’s strong returns,” WGC said.
“Jewellery demand contracted in the face of record gold prices and
challenging economic conditions,” it added.
Emirates 24/7
