Mar 28 2009 |
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Gold sales see fluctuations this year
Saturday, Mar 28, 2009
Gulf News
Although many see gold as a safe haven during volatile times, sales of gold jewellery have recently taken a mild hit in Dubai as the credit crunch continues to bite into consumers' pockets.
Demand for gold has dropped because consumers are becoming more conscious of their spending and tourist levels are falling, according to a former World Gold Council (WGC) official.
"Currently, the market is very depressed in volumes... Figures point to 30 to 40 per cent reduction. The reasons for this drop are of course that buyers in Dubai have become more cautious about spending money as they have lost their jobs, are afraid of losing their jobs or have lost a lot of money in investments during the last few months," said Rolf Schneebeli, economic adviser for gold firm ARY.
The preferences of those who still have cash to spare, however, remain unchanged. Buyers still go for bangles, plain gold pieces and coins. Although the making charges in Dubai might be higher than elsewhere in the region, Schneebeli said jewellery here is known for its quality.
Last year, Dh13.7 billion worth of gold jewellery was cleared from jewellers' shelves in the UAE, up 17 per cent from Dh11.4 billion in sales recorded in 2007. After India and China, the Middle East is the third largest market for gold globally, accounting for 10 per cent of world demand.
Tommy Joseph, general manager for marketing and business development at Joyalukkas Group , said demand for gold jewellery still looks pretty stable, although there has been some weakness in sales. "Customers are still buying gold jewellery because currently gold is considered as the safest investment. Sales of gold jewellery are showing a mild fluctuation due to the unsteady gold prices, but overall, the demand is pretty stable as compared to last year," Joseph said.
© Gulf News 2009. All rights reserved.
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