Lower prices lift Abu Dhabi gold sales

Abu Dhabi’s gold jewellery sales rose 10 percent in volume and 25 percent in value in March as the easing of prices from record highs spurred buying, the Gold and Jewellery Group chief said. “Once prices started to drop, people were just flocking to shops and buy gold, because they thought prices will go higher again, and will break new records,” the industry group’s Tushar Patni told Reuters.

Compared to Dubai, we were lucky, because it looks like we just had the right buyers, more wealthy gold buyers, in the right time,” he said in an interview. Dubai’s gold jewellery sales volume rose 12 percent last month and 5 percent in the first quarter of the year as buyers adjusted to high prices, but traders said the recovery is likely to be short-lived if prices remain volatile. Spot metal fell as low as $877.60 an ounce in Europe on Friday as a sharp drop in a gold-backed exchange-traded fund put a damper on bullion’s initial rally on the back of surging crude oil. The yellow metal was expected to face further downward pressure after falling nearly 15 percent from last month’s record high.

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Gold sales recovering after '07 slump

Abu Dhabi's gold sales, hit by last year's record prices, are slowly recovering as buyers adjust to current high prices, the Gulf emirate's Gold and Jewellery Group chairman said on Saturday.

"The market recovered in January and was unchanged compared to the same period in 2007 ... so we cannot complain after what we saw at the end of last year," Tushar Patni told Reuters.

"The buyers are now accustomed to current price levels, and we think the market is set to see positive sales figures in the coming months."

Spot gold closed at $923.50 (Dh3,371) an ounce in Europe on Friday on positive sentiment, with supply problems, firmer oil and plans by some producers to cut their hedging positions underpinning the market.

Prices have hit several peaks last year hitting gold sales in Abu Dhabi. Sales fell 25 per cent in volume and 30 per cent in value.

A surge in oil prices boosted gold's appeal as a hedge against inflation. The precious metal gained more than 30 per cent in 2007 as safe-haven buying increased due to credit market turmoil and worries about the health of the US economy that sent the dollar to record lows.

"The price surges we saw earlier were an unexpected hit to many buyers in the emirate, but now many know the market is bullish," Patni added.

Tax-free jewellery in the UAE’s gold souks and shopping malls draws Gulf Arab and Western tourists.

Abu Dhabi has 85 gold shops and its own jewellery manufacturers. Imports, however, make up almost 60 per cent of all jewellery sold at retail outlets.

In 2007, gold sales for jewellery and investment in the UAE, a seven-member federation that also includes Dubai, rose almost 12 per cent in volume and 20 per cent in value from the year before as tourism grew, the World Gold Council has said. (Reuters)

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