Dubai's gold trade grew 12.6 per cent in monetary terms in the first quarter of 2010 compared with the same period last year, data shows.

While imports surged during the period, exports slumped, suggesting that bullion banks and traders in Dubai have stored gold for an "appropriate price" to dispose of their reserves, that a good volume of gold was bought locally as jewellery and that a good volume was carried by hand carriers that went unreported.

According to data released by the Dubai Multi Commodities Centre (DMCC), a government agency that facilitates the trade of gold and other precious metals, trade of gold through Dubai stood at $8.3 billion (Dh30.4bn) in Q1 2010 compared with $7.4bn in Q1 2009.

Gold trade in Dubai rose 0.9 per cent quarter-on-quarter, up from $8.26bn in the last quarter of 2009.

The story is different in tonnage terms. While the emirate saw imports of 160 tonnes of gold in Q1 2010, it saw the exports of 90 tonnes. In Q1 2009, the emirate saw imports of 140 tonnes of gold and exports of 116 tonnes. In the last quarter of 2009, Dubai saw imports of 143 tonnes of gold and exports of 101 tonnes.

This implies that while the import of gold into Dubai rose 2.14 per cent in Q1 2010 compared with the previous quarter, exports slumped about 10.8 per cent.

Compared to the first quarter in 2009, the drop in gold exports was even higher – about 22.4 per cent, even as imports grew 14.2 per cent. The DMCC has quoted figures made available by the Dubai World Statistics Department. This overall healthy rise in Dubai's gold trade has emerged when traders across the world have been reeling under a drop in gold demand.

"What's noticeable is that import of gold into Dubai has increased consistently," said a Dubai-based traders.

Gold was priced at $1,222.75 an ounce in the international markets yesterday. It had recently risen to a high around $1,249 an ounce, with analysts expecting it to go to $1,280 an ounce by the end of the year.

Tom Pawlicki of global commodities research firm MF Global said he expects gold to touch $1,250 in the medium term.

"The gold market is expected to maintain its generally sideways-to-higher trend in near-term trade, with an advance towards its all-time high at $1,249.70 likely within a week or two.

"Support will come from ongoing uncertainty and weakness in global equity markets emanating from the Greek debt crisis," said MF Global's Pawlicki.