Dubai gold retail picks up but high prices pose threat
Gold retail volumes in Dubai rose slightly during the second-half of December as holiday offers boosted sales, but the high price of the metal still poses a threat to trade, the dealers said yesterday.
Branded the city of gold, jewellery sales in Dubai has seen continued declines since the end of 2008, as consumers' disposable incomes have fallen due to the global downturn.
The slide continued last year as gold hit a record high of $1,226.10 per ounce on December 3, further making the precious metal out of reach for cash strapped consumers.
"During the last weeks of December sales started to pick up a bit because of the Christmas and new year offers and more tourists, but it's been a slow start to the year because prices are still high," said Vincent George, sales manager at Chittilappilly Jewellers at the Dubai old gold souk.
Spot gold was around $1,127.95 an ounce yesterday, well below the five-week highs above $1,160 an ounce it hit earlier in the week, after China's decision to raise banks' reserve requirements dented appetite for commodities.
"Most buyers in Dubai are still at bay because of high prices, but with the Dubai shopping festival starting this could improve retail sales," said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai.
Nearly all retail gold stores in Dubai plan to take part in this year's month long shopping festival which starts on January 28, retailers said.
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