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01 December 2023

Abu Dhabi gold sales recovering after '07 slump

By Agencies

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)