Dubai retail gold sales slightly up

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Dubai retail gold sales slightly up

Post by BLACK on Thu Jan 13, 2011 4:50 am

DUBAI: Retail gold sales volumes in Dubai were slightly up in December compared with the same time last year as seasonal promotions lured consumers despite the metal's high price, traders said on Wednesday.

"There were many people going on holiday and buying gifts for the family and friends, and with a lot of Christmas and New Year offers there was slightly better demand compared to last year," said a retailer in Dubai's old gold souk.

Gold prices rose to record highs last year as investors worried about the outlook for the euro.

Last week the metal posted its biggest weekly loss since mid-2010, but is clawing back some lost ground. On Wednesday it rose further above $1,380 an ounce in Europe on a softer dollar, rising oil prices and firm physical interest from Asia.

"People are starting to look at gold as a good investment again, we are seeing more buying despite prices being high," another Dubai gold souk retailer said.

On the investment front, more demand is seen in the physical gold bar market from individual investors, said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai.

"Investors are buying more these days because they expect to make good returns this year, we are seeing strong demand in the physical market," he said.

Ten Tola gold bars, known as TT bars, which weigh around 116.6 grams and cost around $5,000 are becoming a popular choice for investors, Unni added.

"TT bars are more affordable than, say, the one kg bars, so we have seen a lot of demand for them in Dubai."

Overall, tonnage demand in the Middle East fell 11 percent in the third quarter last year to 60.4 tons from 68.0 tons in the same period a year earlier, according to the latest World Gold Council report.

Demand in Egypt and the UAE dropped by 8 and 9 percent respectively. While Saudi Arabia and the other Gulf states witnessed a drop of 10 percent year-on-year, it added.
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