Dubai Gold Trade Surges 12pc Despite Dip in Jewellery Sales

Dubai imported 300 tonnes of gold in the first six months, an increase of 13 per cent from the 265 tonnes imported in the same period of 2008, Dubai Multi Commodities Centre, or DMCC, said on Wednesday.

However, gold exports from Dubai swelled by 19 per cent to 213 tonnes during the same six months, up from 179 tonnes in the first half of 2008.

“Higher prices boosted gold export volumes from Dubai,” said Harendra Kailath, Director for Gold and Precious Metals at DMCC. “The metal also ranked high on the list of traders’ inflation-hedging priorities. Given these trends, we believe the outlook for gold trade is positive for rest of the year.”

The traded value of jewellery in Dubai slumped by an average of 50 per cent during the first seven months compared to the January-July period of 2008, as high gold prices, the economic downturn and job insecurity kept customers at bay from jewellery stores.

“The volume of gold that remained in Dubai – the net local consumption that includes jewellery and investment demand — in the first half of 2009... was almost flat during the first six months, reflecting the lacklustre jewellery sector that accounts for 90 per cent of the local gold demand,” said a gold trader who did not want to be identified.

The spot price for gold, which averaged $922 per ounce during the first half of 2009, rose to $965 on Wednesday. In July, gold traded from a low of $909 to a high of $954.50. Spot prices averaged $910 per ounce during the first half of 2008.

“No doubt the market witnessed some volatility in gold prices and was compounded by lower retail sales of gold jewellery, however, the overall investment appeal of gold remained strong throughout the first half of this year,” said Dr. David Rutledge, Chief Executive Officer of DMCC.

In the second quarter of 2009, the gold trade grew by 21 per cent to $7.2 billion from $6.0 billion last year, indicating a steeper climb than in the first quarter.

Dubai imported 160 tonnes of gold during the second quarter, 12 per cent more than in the same period in 2008. Second-quarter exports totalled 97 tonnes, 52 per cent more than last year, the DMMC said.

India, Switzerland and Iran were the top importers from Dubai, while India, Malaysia and Switzerland were top exporters during the six-month period.

The World Gold Council, the international marketing organisation for the gold industry, said in an April report that gold demand in the Middle East in the first quarter had fallen 26 per cent from the year-ago period to 53.6 tonnes. Overall global demand for the metal rose during the same quarter, the Council said.

· issacjohn@khaleejtimes.com