The value of Dubai gold sales was largely unchanged in November from a year ago, but demand is expected to rise in December as buyers adjust to high prices, a top industry executive said.
'The market recovered slightly in November and was unchanged compared to the same period in 2006 ... but we had expected earlier a 30 per cent rise in sales,' Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, told Reuters.
'December is expected to see some improvement as more buyers adjust to the current prices,' he said.
Record gold prices, coupled with a 6 per cent drop in Dubai's gold sales value in October, have deepened anxieties among traders that the Gulf Arab emirate may lose its lustre as a regional gold hub.
In neighbouring Dubai, Gold and Jewellery Group chief Tushar Patni said also that gold sales had fallen 60 per cent year on year in November, and by almost 40 per cent by sales value. Gold has dropped nearly 5 per cent since hitting a two-week high of $836.70 on Monday and hovered below the 14-day moving average of $802.42, highlighting a volatile market since the metal rallied to a 28-year high of $845.40 in November.
'Dubai will need another couple of months before we see a decent rise in sales,' a Dubai-based trader said. 'However, this may take longer if prices continue to rise further and people start to sell scrap gold rather than making any new purchases,' he added.
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 about the health of the US 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 the metal.
Dubai is a long-established market for gold bullion and wholesale and retail jewellery, where the trade is fuelled by strong demand from the Arab world and India, the world's number one gold market.
Tax-free jewellery in the United Arab Emirates' gold souks and shopping malls draws Gulf Arab and Western tourists. Gold sales by the UAE rose 10 per cent in terms of tonnage to 26.3 tonnes in the third quarter of 2007 from the year-ago period, the World Gold Council said in November.
Some local traders feared gold sales volume in the UAE could fall by about 10 per cent in 2007, as it did the previous year due to high prices.
'Prices have to drop further in order to see strong demand in the market here,' a Dubai-based gold bullion trader said. 'But market fundamentals suggest this may take some time and I believe total sales in 2007 will be lower than last year.' (Reters)
'The market recovered slightly in November and was unchanged compared to the same period in 2006 ... but we had expected earlier a 30 per cent rise in sales,' Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, told Reuters.
'December is expected to see some improvement as more buyers adjust to the current prices,' he said.
Record gold prices, coupled with a 6 per cent drop in Dubai's gold sales value in October, have deepened anxieties among traders that the Gulf Arab emirate may lose its lustre as a regional gold hub.
In neighbouring Dubai, Gold and Jewellery Group chief Tushar Patni said also that gold sales had fallen 60 per cent year on year in November, and by almost 40 per cent by sales value. Gold has dropped nearly 5 per cent since hitting a two-week high of $836.70 on Monday and hovered below the 14-day moving average of $802.42, highlighting a volatile market since the metal rallied to a 28-year high of $845.40 in November.
'Dubai will need another couple of months before we see a decent rise in sales,' a Dubai-based trader said. 'However, this may take longer if prices continue to rise further and people start to sell scrap gold rather than making any new purchases,' he added.
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 about the health of the US 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 the metal.
Dubai is a long-established market for gold bullion and wholesale and retail jewellery, where the trade is fuelled by strong demand from the Arab world and India, the world's number one gold market.
Tax-free jewellery in the United Arab Emirates' gold souks and shopping malls draws Gulf Arab and Western tourists. Gold sales by the UAE rose 10 per cent in terms of tonnage to 26.3 tonnes in the third quarter of 2007 from the year-ago period, the World Gold Council said in November.
Some local traders feared gold sales volume in the UAE could fall by about 10 per cent in 2007, as it did the previous year due to high prices.
'Prices have to drop further in order to see strong demand in the market here,' a Dubai-based gold bullion trader said. 'But market fundamentals suggest this may take some time and I believe total sales in 2007 will be lower than last year.' (Reters)
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