The World Gold Council Middle East issues the first gold demand report for 2008

The World Gold Council Middle East's regional office in Dubai announced that the UAE gold sales increased from AED 2.7 billion in the first quarter of 2007 to AED 3.1 billion contributing to a 15% increase.

The same positive sales value increase was recorded in KSA as gold sales increased by 7%. Additionally, Egypt witnessed an astounding sales increase of 64%.

The sharp rise in the gold price, which briefly touched record levels above $1,000/oz in mid-March, was a key determinant of movements in gold demand in the first quarter. It resulted in total demand falling from year-earlier levels by 19% in UAE, 25% in KSA and 30% in other Gulf countries. There was a notable exception in Egypt, where gold demand increased 15% to reach a total of 18.0 tonnes in Q1 of 2008. The rise in the gold price provoked a surge of both jewellery and investment buying in Egypt due to the widespread belief that the price was going to rise further.

The surge in gold price affected markets worldwide. India for example, which is the largest market for gold and also the most price sensitive, continued to suffer from the impact of high and volatile prices as gold demand dropped by almost half the levels of Q1 of 2007.

Commenting on the Middle East market performance, Moaz Barakat - Managing Director of the World Gold CouncilWorld Gold CouncilWorld Gold Council Middle in the Middle East, Turkey and Pakistan said: "Despite the shortfall in tonnage in the recent months, gold's safe haven and hedging characteristics have been a major attraction to investors during this period of instability, greater inflationary fears and falling dollar. In the UAE the increase in the investment sector was from 1.9 tonnes to 2.3 tonnes in Q1 of this year compared to the previous year contributing to a 22% increase.

We also believe that investor interest will remain very strong in the near future and that as the price stabilises, major gold jewellery buying consumers will adapt to a higher floor in the price"

A minor factor also affecting the year on year comparison was the evolution of the Islamic calendar which meant that the beginning of 2007 benefited from the gold buying associated with the Hajj season and Eid al Adha, whereas 2008 did not.

Early indications are that demand in Q2 will be more buoyant than in the first quarter. It also appears that demand for 22-carat gold during the Akshaya Thritiya festival was higher than last year. Provided prices do not rise sharply again, this suggests prospects for the wedding season, which starts in May.

Notes:

The World Gold Middle East (WGC), a commercially-driven marketing organisation, is funded by the world's leading gold mining companies. A global advocate for gold, the WGC aims to promote the demand for gold in all its forms through marketing activities in major international markets. For further information visit www.gold.org

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Dubai gold futures volume down 19pc

The volume of gold futures traded on the Dubai Gold and Commodities Exchange (DGCX) fell 19 percent in March as price volatility in international markets prompted investor caution, the bourse said yesterday. DGCX traded 77,996 gold futures contracts in March, down from 96,099 contracts the previous month, it said in a statement to Reuters.

Total volumes of all contracts—commodities and currencies – traded on DGCX in March stood at 96,192 contracts, up 12 percent from the same period last year, and down 18 percent from the previous month, DGCX said. Gold fell yesterday after erasing overnight gains, as the dollar’s recovery against key currencies lowered the metal’s appeal as an alternative investment.

Spot gold rose as high as $889.10 an ounce and was quoted at $881.95/882.95 at 1020 GMT, against $886.30/888.30 in New York late on Friday, when it hit a 10-day high of $889.80. The precious metal slipped below $900 in April and has since shown little resilience. It hit a record high of $1,030.80 in March.

Dubai launched the region’s first gold futures exchange in 2005 as the economies of Gulf Arab nations boomed on oil income. Total open interest for gold as of March 31 stood at 1,877 contracts, down from 3,894 contracts on Feb. 29, the bourse said.

Dubai is a long-established market for gold bullion as well as wholesale and retail jewellery. Trade has benefited from strong demand from the Arab world and proximity to India.

The average number of gold contracts traded per day stood at 3,900 in March, compared to 4,576 in the previous month, the exchange said.
/Peninsula Online/

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World gold trade focused on Dubai

Netherlands went through a period known as the Golden Age.This refers to the country’s 17th century heyday, when Holland was the world leader in trading (commodities), science and art.

And it was during this time that the first share was issued. This Dutch invention introduced a new form of financing: Equity.
The world’s largest company at that time was a Dutch trading group, VOC, and it issued shares to gather in money with which to invest.

A lot has changed since then; after all, the economic cycle is dynamic. Today’s world shows a different picture, and things are still evolving.

Currently, rapidly developing regions, such as Asia and the Middle East are becoming more powerful, often at the US’ expense. Our rapidly changing economy is also facing changes in the world of gold.

The Dutch traded a lot of gold in the past and Amsterdam was the world centre for gold and diamond trading for a long time. These days, Dubai is becoming the world centre for gold and gold trading.

Gold trading hub

With the Middle East, China and India as important importers of gold, Dubai can be viewed as the principal hub of trading and distribution, as witnessed by the World Gold Council’s recent launch of Shariah –compliant gold shares on the Dubai International Financial Exchange, in conjunction with the Dubai Multi Commodity Centre.
According to GFMS Gold Survey (2006) the world’s production of gold (2,919 tonnes) is distributed geographically in the following proportions; to China (800); India (700); the Middle East (535); Europe (444); North America (235); Russia (87); South America (75); and Australia (10).

Interest in gold has mushroomed recently, partly due to its price surge. The Dubai Gold & Commodity Exchange (DGCX) profits from this interest in commodities in general and in gold in particular, as witnessed by the launch of trading.

In 2007 a total of 1 million commodity contracts (worth $35bn) were traded, showing a rise of 50% on 2006 volumes. Gold futures remained the highest contributor, accounting for a total of 700,000 contracts over the course of the year, valued at approximately $15bn.

Principal exchanges

So which exchanges can be viewed as DGCX’s competitors or rivals?

The London Metals Exchange (LME) is the futures exchange which hosts the world’s largest market in options and futures contracts in base and other metals.

As the LME offers contracts with daily expiry dates up to three months from trade date, as well as longer dated contracts, it also allows for cash trading. It offers hedging, worldwide reference pricing and the option of physical delivery to settle contracts.

Contrary to what you may expect, gold and silver are not traded on LME (so it is not a direct competitor of DGCX), but on the over-the-counter (OTC) market usually referred to as the London Bullion Market by the members of the London Bullion Market Association. Platinum and palladium are traded on the London Platinum and Palladium Market.

In Asia you can look at the Multi Commodity Exchange (MCX) in Mumbai, the Tokyo Commodity Exchange (TOCOM) and the National Commodity Exchange Limited in Karachi.

In the Americas: The Brazilian Mercantile & Futures Exchange (BMF), the New York Mercantile Exchange (NYMEX) and the Chicago Mercantile Exchange (CME).

CME and Chicago Board of Trade (CBOT) merged in the summer of 2007 and since then the CME Group (“the Merc”) has been the world’s largest futures exchange. In the near future, mergers and acquisitions between exchanges will continue; after all, the world is dynamic, and so is the economic cycle. /AME Info/

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Shariah-compliant gold shares to be listed on Dubai bourse

The Dubai Multi Commodities Centre (DMCC) and World Gold Council (WGC) have formed a new company to launch exchange-traded gold securities in Dubai to offer a Sharia-compliant investment choice.

The dollar-denominated Dubai Gold Shares will be traded on the Dubai International Financial Exchange (DIFX) after the companies receive approval from the Dubai Financial Services Authority.

The shares will be fully backed by physical gold and allow investors to gain exposure to gold bullion.

WGC, an industry body funded by the world's leading gold mining companies, said Dubai Gold Shares will be part of its portfolio of exchange-traded gold (ETG) products.

Officials of both WGC and DMCC did not disclose their share in the Dubai Gold Investments joint venture.

The physical gold bars backing the product will be of Dubai and London Good Delivery Standard, and held in the vaults of the custodian, DMCC, and sub-custodian, HSBC. Source

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Dollar Falls, Gold Rises

The U.S. dollar was mostly lower against other major currencies in European trading Thursday. Gold rose.
The euro traded at $1.4616, up from $1.4576 late Wednesday in New York.

Other dollar rates in Europe, compared with late Wednesday, included 108.28 Japanese yen, up from 108.20; 1.1025 Swiss francs, down from 1.1079; and 0.9944 Canadian dollars, down from 0.9976.

The British pound was quoted at $1.9704, up from $1.9649.

In midday New York trading, the dollar bought 107.95 yen and 1.0984 Swiss francs, while the pound was worth $1.9708.

Gold traded in London at $910.30 per troy ounce, up from $903.10 late Wednesday. In Zurich, gold traded at $907.60 bid per troy ounce, up from $899.85.

Silver opened in London at $17.36, up from $17.15. (AP)

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Jewellery trade in Dubai hits Dh240m

Dubai Shopping Festival has added fresh life to Dubai's jewellery sales with the trade recording Dh240 million in sales in the first week of DSF.

According to Tawhid Abdullah, Managing Director, Dubai Gold & Jewellery Group: "Increased numbers of visitors and shoppers during DSF have definitely helped the jewellery trade. Though prices are high, it has not dampened sales during this period. Local customers, visitors from oil rich countries like Saudi Arabia and other parts of the world flock to shopping malls and the Gold Souk during DSF to avail great offers and choose from the wide variety of jewellery designs available. DGJG's daily DSF raffle draws for 1 kilo of gold have also added an element of surprise to jewellery shopping." Source

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Gold soars to historic high

Gold and platinum soared to historic highs yesterday after a power crisis shut South African mines, with a further lift coming from firm oil and expectations of more US rate cuts.

South Africa’s three top gold producers and the world’s biggest platinum miner suspended production at all their mines in the country due to a power crisis.

Gold hit a high of $923.40 an ounce, up more than 8 per cent since tumbling to a three-week low around $850 this week. The metal was at $915.20/916.10 at 1529GMT, against $907.00/907.70 in New York late on Thursday.

Spot platinum XPT hit a lifetime high of $1,697 an ounce.

“Energy is the lifeblood to keep these mines going. South African production is in terminal decline, notwithstanding the five-year bull run in metals, and these outages can only further accelerate their declining position,” Ross Norman, MD at TheBullionDesk.com, said.

“We hold with our view that gold will hit a high of $1,250 this year,” he said.

Gold, traditionally seen as a safe-haven asset and a hedge against oil-led inflation, was also supported by strong oil prices and nervousness in global financial and credit markets.

Oil jumped above $91 a barrel, building on earlier gains.

Bullion investors kept a close eye on the dollar.

Despite the dollar’s marginal gain against the euro, it was seen staying on the back foot in the lead-up to next week’s U.S. Federal Reserve meeting, where markets have priced in the risk for a further 50 basis point cut in the 3.5 per cent rate.

The Fed slashed interest rates by 75 basis points earlier this week in an emergency bid to head off a US recession and halt a global rout in stocks.

A rate cut is often seen as a negative factor for the dollar and investors look for other alternative assets, including gold.

Bullion generally moves in the opposite direction of the dollar.

“Gold’s strongest quarter is going to be the first quarter and we are going to see lower prices later in the year,” said David Holmes, director of metals sales at Dresdner Kleinwort.

“Gold is very much in the headline and there are a lot of supporting factors, including a weak dollar, the stock market turbulence and the possibility of inflation in the US.”

Other bullion markets also surged.

Trading in Tokyo’s gold and platinum futures ended after they rose to their daily limit of ¥120 per gramme.

US gold futures extended gains, with the most active February contract hitting a record $924.30 an ounce.

In other metals, platinum surged more than $90, or 5.7 per cent, to $1,697, before dipping to $1,685/1,690 an ounce, versus $1,606/1,611 in New York.

“In platinum, you have a lot of demand and a lot of potential demand in case oil stays high and diesel (vehicles) become a success in the US,” said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Germany’s Heraeus. (Reuters)

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Gold hits record above $900; platinum, silver surge

Gold hit a record high above $900 an ounce on Monday as turmoil in financial markets, expectations of aggressive US rate cuts and a falling dollar helped raise the metal’s safe-haven appeal.
Platinum also hit a record while silver touched a 27-year peak.

Spot gold hit an all-time high of $909.30 an ounce, against $895.70/896.50 in New York on Friday.

COMEX gold futures touched $911.20 an ounce, surpassing Friday’s record high of $900.10. The most active February contract was later quoted at $910.0, up $12.3 an ounce.

Japanese gold futures were closed for a holiday.

“There is blue sky ahead of us and there is room for gold to go higher. We are in an uncharted territory, really,” said Darren Heathcote of Investec Australia in Sydney. “We have a weaker dollar and that’s encouraged people to buy gold.”

Investors have bought gold as a safe-haven asset after the dollar dropped on expectations the Federal Reserve would cut interest rates by an aggressive half-percentage point at its Jan. 29-30 policy meeting to rescue the US economy.

Fears of further subprime mortgage-related write-downs in the US financial sector and inflation fears driven by record-high crude oil also attracted buying from investors and speculators.

“I can see there’s some short-covering here and there,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

“Nobody knows what the next target is -- $910, or $920 and even $950. We don’t know. There’s short-covering everywhere.”

The euro jumped to $1.4880 on electronic trading platform EBS, its highest level since late November and within sight of a record high of $1.4968 hit that month.

“Dealers just don’t sleep nowadays. Gold broke $900, and there was buying on breakout. It was very, very fast,” said a dealer in Singapore.

But some dealers said gold could have trouble staying above $900 as high prices were likely to turn away jewellery makers and other physical buyers.

“I still think it’s not sustainable. The physical sector is not too enthusiastic to purchase here,” said William Kwan, a dealer at Phillip Futures in Singapore.

“On the speculative side, the small speculators have already gotten out of their shorts,” he added.

Gold’s 14-day relative strength indicator (RSI) rose to 85.95 on Friday as gold hit a record, and hovered above 80 on Monday. The market views an RSI of 30 or less as oversold and 70 or more as overbought.

In Singapore, dealers noted selling from holders who cashed in on gold’s gains as well as limited purchases from jewellers at lower levels.

Platinum hit record high of $1,578 ounce, up from $1,562/1,566 an ounce in New York.

Silver rallied to its highest in 27 years at $16.56 an ounce, up from $16.19/16.24 late in New York.

Palladium rose to $377/381 an ounce from $375/379. (Reuters)

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Gold falls but holds near record high; targets $900

Gold softened in choppy trade on Thursday but held near record highs, with dealers expecting the market to undergo a period of consolidation before hitting the $900 an ounce target.

Spot gold fell to $874.25/875.00 an ounce by 1113 GMT after rising as high as $883.60, against $877.70/878.50 late in New York on Wednesday, when it rose to a record high of $891.40.

“Gold prices appear to be largely taking their direction from dollar movements and investment demand is likely to continue to underpin prices,” Suki Cooper, precious metals analyst at Barclays Capital. said.

“Safe-haven buying, triggered by inflationary concerns, geopolitical tensions and broader market concerns, has the potential to buoy prices further in the forthcoming weeks,” she said, but added the metal might consolidate in the near term.

Gold, which gained more than 30 percent in 2007, entered the new year on a firm note, rising 6 percent on speculative buying ignited by a struggling dollar and record high crude oil prices.

Oil fell below $95 a barrel on Thursday as a rise in fuel stocks in top consumer the United States offset a steep fall in supplies. The dollar was marginally lower against the euro.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

“Technically, gold is still very much biased to clock new highs. Momentum is showing no signs of cooling and any pullback would ideally trigger fresh buying interest,” said Pradeep Unni, an analyst at Vision Commodities in Dubai.

“The next probable stop for gold is around $920 and that is likely to be witnessed before the Fed decision or immediately after that,” he added.

Recent grim U.S. manufacturing and employment data has intensified the likelihood the U.S. Federal Reserve will cut interest rates by half a percentage point later this month. Markets await Fed Chairman Ben Bernanke’s first comments on the economy in 2008 on Thursday.

Long-term trend

In other bullion markets, Shanghai gold futures fell 3.7 percent as some investors sold positions a day after the contract rallied 6.3 percent at its debut.

Tokyo gold futures reversed gains on firming yen and profit taking. The key gold futures contract for December 2008 delivery

ended 17 yen per gram lower at 3,117 yen.

U.S. gold futures also gave up early gains, with the most active February contract down $5.3 an ounce at $876.4.

But gold was expected to jump in the longer term.

“We forecast that gold can trade higher from current levels and see the metal trading to as high as $1000/oz at some point this year,” John Reade, head of metals strategy at UBS Investment Bank, said in a market report.

“But we also see gold ending 2008 somewhat lower than current levels due to our view that the dollar will firm in the second half of 2008, at least against European currencies.

In industry news, South Africa’s gold output fell 12.7 percent in November from a year earlier, tightening supplies in the world’s top producer of the metal.

Gold production has been on a downward slope in South Africa, tumbling by over 50 percent over the past decade, as high-grade mines run out of ore and firms grapple with more difficult and high-cost underground operations.

Platinum dipped to $1,540/1,543 from $1,550/1,554 an ounce in New York on Wednesday, when it hit a record of $1,560. Palladium dropped to $372/375 an ounce from $373/377, while silver fell to $15.56/15.61 from $15.67/15.72.

Polymetal, the world’s fifth-largest silver miner, said it had ended a long-term hedging agreement that had limited profits by requiring it to sell most of its silver at below market price. Source

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Gold prices close in on record high

Gold was on track for its biggest yearly gain since 1979, with prices hovering on Monday about $15 an ounce away from its historic highs.

It has jumped more than 30% this year as a slide in the dollar, record high oil prices, credit market turmoil, falling US interest rates and geopolitical tension helped to increase its safe-haven appeal.
"For gold, this marks the sixth consecutive year of positive returns and consequently represents the longest gold price rally in history," Deutsche Bank said.
In the past days, the metal gained on speculative buying driven by dollar weakness and tensions in Pakistan following the assassination of opposition leader Benazir Bhutto.

"Certainly we are looking for a test of $850 very early in 2008. All the supportive factors are still there. The dollar is very much under pressure and we have got geopolitical tensions," said James Moore, precious metals analyst at TheBullionDesk.com.

"There is going to be some reallocation of money next year and certainly gold is going to get a favour, as a market to move 30% in one direction is going to raise attention."

Spot gold hit a seven-week high of $843.20 an ounce before falling to $835.50/836.30 by 1542 GMT, compared with $837.80/838.50 in New York late on Friday.

Gold was fixed at a record high of $850 in January 1980 on high inflation linked to strong oil, Soviet intervention in Afghanistan and the effects of the Iranian revolution.

After adjusting for inflation, that level was equal to $2,079 at 2006 prices, according to industry estimates.

The latest safe-haven buying was sparked by Bhutto's killing last week, which plunged Pakistan into crisis. Electoral officials hold an emergency meeting on Monday to decide whether to go ahead with a January election that is aimed at shifting the country from military to civilian rule.

"Gold spiked to fresh highs on escalating geopolitical tensions, tightening oil supplies and a weakening dollar, which seem to stack the deck in favour of further upward movement," said Pradeep Unni, analyst at Vision Commodities in Dubai.

The dollar fell versus a basket of major currencies, keeping it on track for its worst annual performance in four years, as investors speculated that 2008 could bring slower US economic growth and lower interest rates.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

Oil steadied near $96 a barrel, heading for its biggest annual gain this decade, as dwindling fuel stocks and growing concern over political turmoil offset the impact of a softening US economy.

"Gold is likely to consolidate its impressive gains made in 2007. Expectations are for higher peaks to be achieved in the New Year as the unrelenting strength does not look like it will abate anytime soon," Standard bank said in a report.

The Tokyo Commodity Exchange was closed for a holiday.

The most-active February gold contract on the US futures exchange fell $3.7 to $838.90 an ounce.

The market awaited US existing home sales data at 1500 GMT and jobs data later in the week for clues on the prospects for US interest rate cuts and the health of the US economy.

Thin trading ahead of the New Year holidays meant gold and other precious metals were prone to sharp fluctuations. Platinum dropped but held near last week's record high of $1,542.

Platinum fell to $1,528/1,532, versus $1,534/1,538 an ounce in New York and last week's record high of $1,542. Silver rose to $14.78/14.83 an ounce from $14.72/14.77 in New York, while palladium gained $5 to $3685/371 an ounce. (Reuters)

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Gold hits one-week highs on dlr, AngloGold talk

Gold hit a one-week high on Friday on a weaker dollar and firmer oil prices, while platinum hovered near record highs, analysts said.
Market talk that AngloGold Ashanti Ltd, the world’s third biggest gold producer, might partly close its hedge book also supported the market, analysts said.

Gold fell to $795.30 an ounce overnight before rising as high as $812.20. It was quoted at $811.05/811.75 by 1450 GMT, against $797.30/798.00 in New York on Thursday, when it hit a low of $793.20.
“We are seeing some investor year-end interest on the buy side. It obviously had an impact on the market because volumes are lower than usual. It’s a relatively thin market,” said David Holmes, director of precious metals sales at Dresdner Kleinwort.
He said talk that AngloGold might have been planning to close part of its hedging position was also a factor behind the upward price move.

A spokesman at AngloGold declined to comment on the talk.
AngloGold’s new Chief Executive Officer Mark Cutifani told Reuters last month that it was reviewing its operations with a view to disposing assets that do not add value, and also might ”lighten” its hedge book.

Gold also got some support from a weaker dollar and firmer oil in a thin market ahead of Christmas and year-end holidays.
The dollar fell against the euro as investors skimmed profits off a recent rally, but rose versus the yen on a report of a $5 billion capital infusion for U.S. brokerage giant Merrill Lynch.
Gold often moves in the opposite direction of the dollar and is generally seen as a hedge against oil-led inflation.

Oil held near $91 a barrel as falling inventories in top fuel consumer the United States.
Long-term sentiment remained positive and traders said gold and platinum had potential to scale new highs in the first quarter of the new year, with positive fundamentals and an expected decline in the dollar seen helping prices.
“With traders still tracking the dollar, and players caught between locking in profits for year-end and increasing their safe-haven holding on dips, the yellow metal looks set to remain in a volatile mood, spending more time in its current range between $785-812,” TheBullionDesk.com said in a report.
In other markets, the most active February contract in the U.S. futures market was up $11.9 at $815.10 an ounce.
“We expect to close the year around $800. Probably we will see some inflow again at the very beginning of the next year and see gold rallying in the first and the second quarters,” said Frederic Panizzutti, metals analyst at MKS Finance.

Platinum outlook bullish
Platinum traded near this week’s lifetime highs, underpinned by high lease rates and concerns over tight market conditions following a series of deadly mining accidents in South Africa, the world’s top producer.

Spot metal was up $3 at $1,515/1,520 an ounce.
“We are very bullish for platinum on the back of supply-demand issues. We have quite a big deficit, which may increase next year,” said Panizzutti.
Johnson Matthey, the world’s top platinum refiner and fabricator, said in November the market would change course in 2007 and see a deficit of 265,000 ounces. It had a surplus of 65,000 ounces in 2006 after seven successive years of deficits.
In market news, production of some 2,500 ounces of platinum group metals were lost during a strike at a mine owned jointly by Aquarius Platinum and Anglo Platinum, but partial output resumed on Friday.
Palladium was flat at $353/357 an ounce, while silver rose to $14.36/14.1 an ounce from $14.22/14.27. Source

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Gem & Jewelry Academy to Open in Dubai

An initiative by the UAE-based ARY Group, the ARY Academy of Gems & Jewellery, will be established in Dubai and will open its doors on January 5. The academy will provide extensive education and training in all aspects of the gold and precious metals trade.

It will also offer various certificates and diploma courses in the design, manufacture, assaying and management of gems and jewelry, geared to support the growth and transformation of the gold and jewelry trade in the area.

Programs offered at the institution will cover various aspects of Gemology, Jewelry Design, Gem & Jewelry Management and Business Administration.

The initiative is recognized by the Knowledge Village in Dubai, a learning community established as part of a long-term economic strategy to develop the region’s talent pool and accelerate its move into a knowledge-based economy.

“The region has been witnessing tremendous growth in per capita consumption of gold and jewelry, increase in the number jewelry retail outlets, and employment opportunities in this sector,” noted Academy CEO Sarwat Abdul Razzak. “It is imperative that such a growing industry gets the support of qualified and trained personnel in all aspects of the trade.” Source

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Dubai's gold demand seen rising

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)

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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

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Gold, silver hit multi-year highs on oil, dollar

Precious metals zoomed higher on Wednesday on a tumbling dollar and record high oil, with gold trading near its all-time peak, platinum setting a record and silver touching its highest level in 27 years.
Buying was also spurred following uncertainty in the US credit market and expectations that the Federal Reserve will cut interest rates further.

‘There is a flood of money coming into gold at the moment. You can’t really stand in the way. There are hundreds of things that are supporting the market,’ said Jeremy East, global head of metals trading at Standard Chartered Bank.
‘It’s a one-way street at the moment. Strong oil prices, a weaker dollar, subprime issues and a rush into safe-haven—everything is supporting,’ he said.
Spot gold hit a high of $845.50 an ounce, the highest since January 1980 when it was fixed in London at a record high of $850. It was quoted at $839.25/839.95 by 1014 GMT, against $820.90/821.70 late in New York on Tuesday.
Gold has surged more than 32 percent in three months and has doubled in less than three years.
After adjusting for inflation, gold’s record level in 1980 was equal to $2,079 at 2006 prices. The metal surged then on high inflation linked to strong oil prices, Soviet intervention in Afghanistan and the effects of the Iranian revolution.
The dollar fell broadly, hitting a fresh all-time low against the euro and a basket of currencies after comments from senior Chinese officials stirred concerns the central bank might shift reserves away from the US currency.
The euro was also supported by lingering market expectations of a possible US Federal Reserve cut in interest rates in December, and a view that the European Central Bank would keep euro zone interest rates steady for a while.
Momentum buying
A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil prices stormed towards $99 a barrel, closing in on a triple-digit all-time high, driven by the slumping US dollar and concern about a fuel supply crunch heading into the peak demand winter season.
‘The momentum is so strong, I can’t tell you where it’s going to stop. All the factors are in favour of gold,’ said David Holmes, director of metals sales at Dresdner Kleinwort.
The physical sector came to a standstill as rising prices scared off jewellery makers in Asia. Dealers in Singapore also noted selling of gold scrap from Indonesia, which is Southeast Asia’s largest consumer, as holders cashed in on gold’s rally.
In other bullion markets, benchmark Japanese gold futures rose more than 2 percent to hit a 23-year high. US gold futures also jumped, with the December contract trading up $18.6 at $841.90, having hit a high of $848.
Silver was catching up with gold, and rallied to its highest level since January 1981. Spot silver hit an intraday high of $16.19 ounce, before dipping to $15.72/15.76, still up from $15.37/15.42 in New York.
Platinum hit a record high of $1,484 an ounce to track gold’s jump, before dipping to $1,475/1,479, higher than $1,473/1,477 in New York.
Palladium rose to $378/382 an ounce from $375/379 in New York. It hit a high of $382 -- its highest since late April.

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Precious metals correct lower on profit-taking

Gold futures witnessed a correction on Tuesday after having rallied to a 28-year high in the previous session pressured by a steep decline in crude oil prices and as traders decided to lock-in gains, according to the market pulse report of the Dubai Gold and Commodities Exchange.
On DGCX, December delivery gold futures edged lower by $10 while the near-term silver futures followed suit and suffered a decline of 0.69%. In the Forex market, the greenback continued to weaken against its major counterparts and dipped to a record low against the Euro as investors were reluctant to take big positions ahead of the US Federal Reserve?s decision on interest rates. Conversely, it continued to strengthen against the Japanese Yen.

Following significant gains in the previous session, DGCX December 2007 delivery gold futures contract opened on Tuesday at $788.50/troy oz, showing a huge downward gap of $6.50 from its previous close. Prices momentarily braced a high of $789.50 before retreating to an intraday low of $782.70. The contract staged a mild recovery and concluded the session at $785, logging in a loss of $10 or 1.26% for the day. Open interest in the December futures tumbled by 304 contracts from its previous close and ended the session at 2430. DGCX Gold futures for February 2008 delivery rounded up the session at $792/troy oz, registering a loss of $8.90 or 1.11%. DGCX December?07 silver futures recorded a loss of 10 cents or 0.69% and settled at $14.355/troy oz. DGCX February 08 steel rebar futures contract opened at $609/mt and retreated to a low of $607.90 before surging to touch a high of $611.30. The contract finally concluded the session at $609.80 churning in a gain of $1.60 or 0.26% In the Forex market segment, DGCX Euro contract for December 2007 opened at $1.4404/Euro and receded to a low of $1.4395 before climbing to an all-time high of $1.4451. The contract ended the day at $1.4449, recording a mild gain of 0.08%. Dec?07 dated DGCX GBP contract opened at $2.0567/GBP and fell a tad before rallying to an intraday high of $2.066. The contract finally concluded the session at $2.0652, churning in a gain of 0.28%. DGCX Yen futures maturing in Dec?07 declined by a tiny margin of 0.08% and settled at an exchange rate of $0.8762 for 100 Yen. The Indian Rupee futures for November?07 marked a rise of 0.14% and settled at $2.5349 for 100 rupees.
DGCX Fujairah Fuel Oil contract for October 2007 experienced a fall of $3.50 or 0.72% from its previous close and concluded the session at $479.30/metric ton.
In the US energy markets, crude oil futures closed lower for the first time in five sessions as supply data forecasted a rise in US crude inventories. December-expiring crude oil futures declined by $3.15 from its previous close and concluded the session at $90.38 a barrel. Source

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55pc increase in Dubai gold trade

Gold trade through Dubai reached USD 5.23bn in the third quarter of 2007, an increase of 55pc from USD 3.37bn during the same period in 2006, Dubai Multi Commodities Centre (DMCC) announced Thursday.
"A total of 174 tonnes of gold was imported into Dubai in the third quarter of 2007, 47pc higher than 118 tonnes in the same period in 2006. This is the highest third quarter imports recorded in the last seven years. During the same period, a total of 68 tonnes of gold was exported from Dubai, 28pc higher than 53 tonnes in the same period in 2006." Dubai's top trading partners for gold include India, Switzerland, Malaysia and the GCC states. India and Switzerland were top importers from Dubai and India, Australia, Malaysia, USA and Switzerland were top exporters to Dubai.

"The sharp rise in gold prices around the world has had a strong bearing on global gold trade. Despite consistently rising prices, the value of gold imported and exported through Dubai in this quarter has increased by 55pc. This continued confidence in Dubai's gold market reinforces the emirate's traditional role as an important hub for the international gold trade", said Dr. David Rutledge, Chief Executive Officer at DMCC. Source

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Precious metals post a sharp decline as crude falls and US dollar rebounds!

Gold futures ended sharply lower on Monday as the US dollar traded higher against major currencies and crude oil prices posted a steep decline, According to the markert pulse report on the Dubai Gold and Commodities Exchange (DGCX).
December delivery gold futures witnessed a substantial fall of $11.90 while the near-term silver futures suffered a huge setback of 27.50 cents/troy oz. In the Forex market, the greenback rallied against the British pound and the Indian Rupee and recovered from record low against the Euro as traders focussed on the fact that the Group of Seven summit of finance ministers and central bankers failed to explicitly address the US currency?s weakness. Meanwhile, it continued to weaken against the Japanese Yen.

Following a decline on Friday, DGCX December 2007 delivery gold futures contract opened on Monday at $766/troy oz, showing a huge downward gap of $3.20 from its previous close. Initially, the contract rose momentarily to a high of $766.30 only to plummet later to an intraday low of $749.50. Prices staged a recovery towards the end of the session and concluded at $757.30, logging in a significant loss of $11.90/troy oz 1.55%. Open interest in the December futures slumped by 661 contracts and ended the session at 2198. DGCX Gold futures for February 2008 delivery rounded up the session at $762.90/troy oz, recording a substantial loss of $11.60 or 1.55%. DGCX December?07 silver futures settled at $13.34/troy oz, posting a huge decline of 27.50 cents or 2.02%.
In the Forex market segment, DGCX Euro contract for December 2007 opened at $1.4324/Euro and thereafter climbed to touch a life-time high of $1.4350 before retreating to a low of $1.4145. The contract finally concluded the session at $1.4166, thereby tallying a loss of 0.99%. Dec?07 dated DGCX GBP contract opened at $2.0460/GBP and temporarily braced a record high of $2.05 before receding to a low of $2.0227. The contract finally settled at $2.0258, registering a loss of 1.04%. DGCX Yen futures maturing in Dec?07 appreciated by 0.56% and settled at an exchange rate of $0.8822 for 100 Yen. The Indian Rupee futures for November?07 declined by 0.22% and settled at $2.5049 for 100 rupees.
DGCX Fujairah Fuel Oil contract for October 2007 experienced a substantial fall of $6 or 1.39% from its previous close and concluded the session at $426.30/metric ton.
In the US energy markets, crude oil futures closed lower on Monday pressured by profit taking after last week?s record breaking advance in prices as well as by reports that Kurdish rebels in Turkey are about to announce a ceasefire. November-expiring crude oil futures declined by $1.04 to conclude the session at $87.56 a barrel. Source

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Precious metals prices move in opposite directions

Gold futures closed lower on Friday retreating from a 27 year high, but posted strong weekly gains of more than 3% following a weak US dollar and high oil prices, according to the market pulse report on Dubai Gold and Commodities Exchange (DGCX).
On DGCX, October delivery gold futures closed lower at $733.00/troy oz recording a loss of 0.39%. The near-term silver futures defied the direction of the yellow metal, marking a gain of 15.50 cents or 1.15%. In the Forex Market the US dollar continued to weaken against the Euro and the British pound but improved slightly against the Japanese Yen and the Indian Rupee.

DGCX October 2007 delivery gold futures contract opened on Friday at $737.80/troy oz showing an upward gap of $1.90 from its previous close. Prices initially braced to a high of $739.10 and thereafter receded to a low of $728.10. The contract finally settled at $733.00/troy oz - churning in a loss of $2.90 or 0.39%. Open interest in the October futures edged lower by 75 contracts and ended the session at 632. DGCX Gold futures for December delivery concluded the day at $740.00 logging in a loss of $1.80 or 0.24%. DGCX December?07 silver futures ended today?s session at $13.655/troy oz, recording a gain of 15.50cents or 1.15%.
In the Forex market segment, DGCX Euro contract for December 2007 opened at $1.4110/Euro and declined to a low of $1.4067 during early part of the session. Later in the day it soared to its lifetime high of $1.4120. The contract finally concluded the day at $1.4105 near the higher traded levels posting a gain of 0.03%. Dec?07 dated DGCX GBP contract opened at $2.0065/GBP and fell a tad before climbing to a day high of $2.0167. The contract finally ended the session at $2.0160 logging in a gain of 0.53%. DGCX Yen futures maturing in Dec?07 edged lower by 0.96% and settled at an exchange rate of $0.8746 for 100 Yen. The Indian Rupee futures for October?07 depreciated by 0.14% to settle at an exchange rate of $2.5051 for 100 rupees.
DGCX Fujairah Fuel Oil contract for September 2007 added 50cents or 0.13% to its previous closing figure and concluded the session at $400.30/metric ton.
In the US energy market crude oil futures closed slightly lower on Friday taking a break from a record run that began early last week, but the new benchmark contract gained 5% for the week. November delivery crude oil futures ended lower by 16 cents to close at $81.62 a barr. Source

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Dubai gold sales surge 26%

Dubai gold sales rose 26% in value in August year-on-year as demand from tourists increased and the economy improved, an industry executive said on Saturday.
"The market is not affected by the current prices of gold and we have a better economy in Dubai and strong consumer confidence," Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, told Reuters.
"We saw a 26% increase in sales value last month and we could see about 40% increase in September.

Abdullah said he expected about 35% rise in sales value in third quarter of the year and about 40% increase in the fourth quarter as customers raise their purchases in Ramadan and the Dubai Shopping Festival.
Ramadan, which started on September 13, is a month of fasting for devout Muslims and ends with a feast when many couples marry.
Some local traders feared gold sales volume in the UAE could fall by about 10% in volume in 2007, as they did in the previous year due to both volatile and high prices.
But industry executives said the regional appetite for gold remains strong despite the relatively high prices.
Gold rose above $700 an ounce mark this week helped by the faltering dollar to hit a 16-month high of $714.20 on Tuesday before retreating slightly.
Tax-free jewellery in the UAE's gold souks and shopping malls draws Gulf Arab and Western tourists.
Gold sales by the UAE rose 22% in terms of value in the second quarter of 2007 from the year-ago period as demand from tourists increased, the World Gold Council (WGC) said on Wednesday.
Sales value stood at 2.8 billion dirhams ($762.5 million), it said.
Second-quarter demand rose 14.6% to 29.8 tonnes from the same period in 2006, it said in August.
The value of gold sales in Gulf Arab countries is expected to grow 15 to 20% a year as economies expand and tourism grows, the chairman of Dubai Gold and Jewellery Group said in April. Source

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