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15 July 2024

Dubai gold imports up 14.3%

By Agencies


Dubai's gold imports rose 14.3 per cent to 559 tonnes in 2007 as investors' appetite for the precious metal stayed strong despite record high prices, the Dubai Multi Commodities Exchange (DMCC) said on Saturday.

Dubai's gold exports rose 4.7 per cent last year to 287 tonnes, according to the DMCC, a majority stakeholder of the Dubai Gold and Commodities Exchange (DGCX).

"Ongoing investor demand from across the world and global concerns about currency and inflation underline the nature of gold as a safe investment," Ian MacDonald, DMCC's executive director for gold and precious metals, said in a statement.

"Dubai's gold trade has also benefited considerably from the tight supply and strong demand fundamentals of the metal."

Dubai is a long-established market for gold bullion and wholesale and retail jewellery, where the trade is fuelled by strong demand from the Arab world and India, the world's number one gold market.

Gold trade through the emirate reached $19.03 billion in 2007, up 29 per cent from 2006.

Gold is seen as a safe-haven metal and as a hedge against inflation. The metal is also influenced by oil, currency moves, and generally trades in the opposite direction of the dollar.

Gold surged to a historic high of $914 an ounce on January 14, as investors rushed in to buy the metal on further weakness in the dollar and expectations of a sharp cut in US interest rates.

The precious metal rose more than 30 per cent in 2007 amid safe-haven buying due to credit market turmoil and worries about the health of the US economy, which sent the dollar to record lows, as well as record high oil prices.

Tax-free jewellery in the United Arab Emirates' gold souks and shopping malls draws Gulf Arab and Western tourists.

Recent drops in sales value of gold jewellery have deepened anxieties among traders that the emirate may lose its lustre as a regional gold hub.

Traders fear that high prices could scare off gold jewellery buyers in Dubai if the price rises above $900 an ounce.

In 2007, gold sales for jewellery and investment in the UAE, a seven-member federation that includes Dubai and Abu Dhabi, increased by 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)