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Across the board increase in retail gold sales in the second quarter in all the six GCC countries was announced by the World Gold Council regional office based in the UAE.
According to Moaz Barakat, Managing Director for the Middle East, Turkey & Pakistan, several factors have led to the improved performance in Q2-2005. These included strong and surging oil prices that have been at the helm of consumer optimism in this oil-rich region.
The UAE has also benefited, particularly and significantly from the increase in the number of tourists as well as a booming economy and sustained promotions. The 73-day Dubai Summer Surprises Festival has fuelled demand for gold during the traditional summer holiday period.
Barakat also added that jewellery demand in Saudi Arabia increased by 18 % in Q2-2005 compared to the same period in 2004. Certain measures undertaken by the Saudi Government including a reduction in customs duty and the easing of the Saudi-isation programme have started to boost demand. The relaxation of the Saudi-isation rules was of particular benefit, easing the restraints many outlets faced in finding adequate number of trained and qualified Saudi staff.
Despite turbulent situations around the globe, the gold market remains healthy and growing in the Gulf. For instance, gold sales in Saudi Arabia increased by a whopping 28% and by over 19% in the UAE during the second quarter of 2005. Other countries in the Gulf witnessed an increase in gold sales by 17%.
The UAE has also demonstrated impressive results in gold & jewellery sales. In terms of revenue gold sales during Q2-2005 increased to USD $ 493 million from USD $ 411 million during the corresponding period in 2004. The UAE gold consumption in terms of tonnage registered a 10% increase in the same period. Overall, the gold jewellery consumption increased by over 9% from 26.4 tonnes in 2004 to 28.9 tonnes in 2005, while retail investment (bullion bars and bars) consumption increased by 20% from 1.5 tonnes in 2004 to 1.8 tonnes in 2005.
The ballooning sales figures in the Gulf demonstrate the high affinity by consumers towards gold and gold jewellery.
Table I:
Gold consumption (in tonnes):
Period Q2-2004 Q2-2005 % Change
UAE 28 31 10%
Saudi Arabia 42 50 19%
Egypt 16 17 6%
Other Gulf* 12 13 8%
Total 98 111 13%
(*Other Gulf: Kuwait, Bahrain, Qatar & Oman)
Table II:
Gold consumption in sales (in USD $ millions)
Period Q2-2004 Q2-2005 % Change
UAE 407 487 19%
Saudi Arabia 611 786 28%
Egypt 233 267 14%
Other Gulf* 174 204 17%
Total 1,425 1,744 22%
(*Other Gulf: Kuwait, Bahrain, Qatar & Oman)