The World Gold Council’s regional office in Dubai announced that the retail gold sales increased by 21% in the third quarter of 2007 compared to the same period of 2006. Sales figures in the UAE increased from 2 billion Dirham in the third quarter of 2006 to 2.5 billion Dirham in the third quarter of 2007.
On the other hand, the table below demonstrates that the UAE gold consumption in terms of tonnage increased from 23.9 tonnes in Q3 of 2006 to 26.3 tonnes in the same period of 2007 contributing to a 10% increase.
Demand remained strong throughout the Middle East increasing by 19% in Saudi Arabia, 15% in Egypt and 3% in other Gulf countries combined. The strong economies in the Arabian Peninsula and a recovering economy in Egypt, together with the favourable price environment for jewellery buying in the first two months of the quarter, easily outweighed the negative impact of the price rise in September.
Saudi Arabia also enjoyed an economic boom. Although based on high oil prices, much of the direct impetus to growth is coming from increased government spending on infrastructure and social projects and this is in turn is generating higher incomes throughout the country and thus supporting consumer spending including that on luxury products such as gold jewellery. The reduction in customs duty on imported jewellery from 12% to 5% which took effect in March is helping to improve the range of products on offer.
Recovery continued in Egypt with jewellery demand 15% higher than a year earlier. The third quarter jewellery demand was the highest since 2002 in tonnage terms. The country enjoyed a good tourist season during the summer with a number of wealthy Middle East tourists diverted to Egypt from their normal vacation in Lebanon due to the ongoing political tensions.
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