DUBAI (Reuters) – Abu Dhabi gold sale volumes were steady in May but demand from expatriates buying summer gifts was expected to boost sales in the coming months, the emirate’s Gold and Jewellery Group chairman said on Sunday.
“The beginning of the summer is usually a quiet period here, but as we approach July many expatriates, mainly from the Indian sub-continent, start to buy gold as gifts before they go home for vacations,” Tushar Patni told Reuters.
“The sales volume was steady last month, about 15 percent higher in value due to the high gold prices, but I think sales figures for June, July and early August will be better in terms of value and volume,” he said in an interview.
Gold’s surge to multi-year highs earlier this year scared buyers in many parts of the world.
Spot gold powered to a record of $1,030.80 an ounce on March 17 on record-high crude oil, fears of inflation and expectations of more rate cuts in the United States, making the metal more attractive as an alternative investment.
The yellow metal has since fallen, but rose to a high of $900.30 an ounce on Friday on the back of record crude oil prices and the falling dollar.
Abu Dhabi’s gold jewellery sales rose 10 percent in volume and 20 percent in value in April compared with the year-ago period, fuelled by demand from foreign residents despite high prices.
Sales of gold jewellery in the capital were steady in volume in the first quarter of 2008 compared with the same period a year earlier, but their value rose by 30 percent on record high prices, he added.
“Looking at the market now I think the second-quarter sales volume will be higher compared to the same period last year, which we did not expect before,” Patni said.
Tax-free jewellery shopping in the United Arab Emirates lures many Gulf Arab and Western tourists.
Demand in the Gulf Arab country fell 19.3 percent to 24.2 tonnes in the first quarter of 2008, the industry-funded World Gold Council said in May.
The value of gold sales in the seven-member federation that includes Dubai, known as the “City of Gold”, rose 15.1 percent to $862 million during the same period.