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Gold Sales Up in UAE
January 14, 2005
Khaleej Times
Despite sharp increase in
gold prices, customers in the UAE are buying gold as it is still seen as a
safe haven from an investment perspective.
"Last year, gold had appreciated by 25 per cent and I believe that we will
see another double digit growth this year. This is not just idle
speculation. From what we have seen in the market, even with the rise in
diamond sales, gold sales have not dropped,'' said Karim Merchant, managing
director of Pure Gold, one of the major players in jewellery market.
At present, the price of 10 tola gold in UAE is Dh 7,490, while 24 carat
pure gold costs Dh65 per gram and 22 carat gold Dh61 per gram.
According to Dubai Gold and Jewellery Group, this has not discouraged people
from investing in gold jewellery in Dubai.
When asked about the buyers of gold in the present scenario, he said: "In
terms of market, there is no doubt that customers from the subcontinent have
a spiritual connection to gold. They are the biggest buyers when it comes to
gold. However, we also see heavy investment in gold by Arabs and buyers from
the Middle East. In terms of the market, tourists comprise around 60 to 65
per cent of the buyers."
Khaleej Times spoke to an Indian lady who is visiting Dubai for the first
time while buying gold jewellery in bulk at Meena Bazaar in Bur Dubai.
She told this correspondent: "We are buying gold for our relatives and
friends and for my daughter's marraige from Dubai as it is cheaper than
India and purity is guaranteed apart from the buy-back benefit. Gold from
the UAE is very popular in India and the quality and designs are far better
than that of India.''
Merchant also highlighted the factors responsible for this increase in price
and said: "I believe that gold prices increasing in 2005-06 is due to two
major factors."
"One is inflation, and the other is because of new money coming into the
market. Fund managers are becoming extremely rich because they are investing
heavily in gold. Gold has become extremely popular as it has become
accessible in the regional and international exchanges like the DGCX and
London Metal Exchange. Gold is definitely more accessible than it was 5
years ago."
He concluded by saying that the DGCX is an important contribution to the
industry as this region needed a commodities exchange.
"When working with international exchanges, there was always the issue of
timing as when we were open, they were closed and vice versa. However, now
with the DGCX that issue does not exist. As a retailer I find it more
convenient to trade with the DGCX."
Future plans include, opening one outlet every month as Pure Gold intends to
have additional 35 stores all over the UAE by 2006.
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