Abu Dhabi Nov gold sales drop on high prices
Record high gold prices have hammered sales of the precious metal in Abu Dhabi in November, the Gulf Arab emirate's Gold and Jewellery Group chief said yesterday.
The 60 per cent plunge in volume in November appeared to indicate that December sales would also be badly hit, Tushar Patni said. "The market is stagnant, and we are expecting December to be a very bad month for gold sales. There is no optimism down here," Patni said.
Gold hit a 28-year high of $845.40 an ounce in November. "Because prices were just too high for everyone in the market, we saw a 60 per cent drop in sales volume and almost 40 per cent drop in sales value last month," he said in a telephone interview. "The buyers we had in the market were those who were exchanging old gold for new pieces." Patni said gold sales in the fourth quarter would be hit if prices did not ease. "In the fourth quarter I expect sales value to fall at least 15 percent and volume 20 per cent if prices remain at current levels. But if they go higher, the market will see (even) more negative results," he said. Gold's relationship with the dollar was also seen as a potential stress point for the market. The dollar has hit successive record lows versus the euro and a basket of major rival currencies amid concerns on the health of the U.S. economy and global credit markets. Analysts said extreme volatility could cap longer-term investment in the precious metal, while higher prices could result in increased sales of metal scrap and prompt central banks to sell more of their holdings.
Tax-free jewellery in the United Arab Emirates' gold souks and shopping malls draws Gulf Arab and Western tourists.
Gold sales by the country rose 10 per cent to 26.3 tonnes in the third quarter of 2007 from the year-ago period, the World Gold Council said in November. Source
The 60 per cent plunge in volume in November appeared to indicate that December sales would also be badly hit, Tushar Patni said. "The market is stagnant, and we are expecting December to be a very bad month for gold sales. There is no optimism down here," Patni said.
Gold hit a 28-year high of $845.40 an ounce in November. "Because prices were just too high for everyone in the market, we saw a 60 per cent drop in sales volume and almost 40 per cent drop in sales value last month," he said in a telephone interview. "The buyers we had in the market were those who were exchanging old gold for new pieces." Patni said gold sales in the fourth quarter would be hit if prices did not ease. "In the fourth quarter I expect sales value to fall at least 15 percent and volume 20 per cent if prices remain at current levels. But if they go higher, the market will see (even) more negative results," he said. Gold's relationship with the dollar was also seen as a potential stress point for the market. The dollar has hit successive record lows versus the euro and a basket of major rival currencies amid concerns on the health of the U.S. economy and global credit markets. Analysts said extreme volatility could cap longer-term investment in the precious metal, while higher prices could result in increased sales of metal scrap and prompt central banks to sell more of their holdings.
Tax-free jewellery in the United Arab Emirates' gold souks and shopping malls draws Gulf Arab and Western tourists.
Gold sales by the country rose 10 per cent to 26.3 tonnes in the third quarter of 2007 from the year-ago period, the World Gold Council said in November. Source
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