The World Gold Council’s regional office in Dubai announced that the second quarter of 2007 witnessed an increase in gold sales in the UAE as Sales figures reached 2.8 Billion Dirham contributing to a 22% increase as the sales were 2.3 Billion Dirham in the same period of 2006.
Demand in UAE, was strong with Q2 consumer demand 15% above as compared to year-earlier and jewellery demand 18% higher. This is because of the economy remained very strong and tourist numbers continue to grow – especially towards the end of quarter two when the Dubai Summer Surprises Festival has started. Total gold demand in UAE in Q2 reached 29.8 tons which is an increase from 26 tons in the same period of 2006.
Overall demand in the Middle East region (Saudi Arabia, UAE, Kuwait, Bahrain, Oman, Qatar & Egypt) was 20% to 97.5 tonnes higher than the depressed levels of the same quarter in 2006 (jewellery demand increased by 21%, net retail investment increased 9%). The increase was due to strong economies and stable prices in this region.
In Saudi Arabia (the fifth largest jewellery market) consumer demand was 30% higher than in Q2 2006 (jewellery up 30%, net retail investment up 30%), equivalent to a 38% increase in dollar terms. Demand by Umrah pilgrims and tourist in Q2 2007 saw a good Umrah & holiday seasons. The current promotional campaign “Miss L’Azurde” run by L’Azurde in partnership with the World Gold Council has been noted as being particularly successful; furthermore, the decision at the end of March to reduce duty on imported jewellery from 12% to 5% also starting to improve the product offering; also, the impact of the wedding season which runs from mid-May to Mid-July and makes Q2 a seasonally strong quarter. The combination of all these elements should continue to support demand in Q3, which should therefore see further recovery, always provided the price remains relatively stable. Around 400 gold & jewellery outlets are participating in the Jeddah Gold Shopping Festival. An under lying supportive factor is that stock market euphoria is no longer diverting the attention of trade and consumers as it did prior to last year’s crash. Total gold demand in Saudi Arabia in Q2 2007 was 42.5 tons.
In Kuwait, Bahrain, Oman and Qatar, total demand was 12.0 tons – a total increase of 15% in tonnage year-on-year.
In Egypt, market is fundamentally strong, and economic trends continues in the second quarter including tourist numbers have been positive. Consumer demand was 9% higher as compared to year-earlier and jewellery demand 8% higher. Total demand in the Egyptian market reached 13.3 tons in 2007.
Demand in Turkey was very strong in the Q2 particularly in May and June; in addition the government pumped extra money into the economy ahead of the July election boosting consumers’ purchasing power. As a result, Turkey enjoyed second-quarter record for both jewellery demand, at 52.2 tonnes and net retail consumption, at 20.5 tonnes, an increases of 14% and 5% respectively on the previous quarter. Total gold demand in Turkey in the first quarter 2007 was 72.8 tons.
Commenting on these figures, Moaz Barakat, World Gold Council’s Managing Director in the Middle East, Turkey & Pakistan, said: “we are pleased to report a very strong second quarter with demand for gold reaching unprecedented levels in a number of markets. A reduction in price volatility in 2007 has resulted in increased consumer confidence and, coupled with greater industry marketing activity, led to record levels of gold jewellery purchases in the region and globally in dollar terms”.
Mr. Barakat added: “the results of World Gold Council’s activities and projects in the region especially in the Gulf countries where excellent as per the latest market researches to measure the impact. Such activities has increased the awareness of the importance of gold among the consumers as gold, specially gold jewellery is more than a precious life style product; it is a genuine and elegant expression of feelings that develops with the modern life in the form of fashionable, modern and classy products, which at the same time a store of value”.
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