DUBAI // Gold revenues in the UAE saw a 56 per cent increase in the third quarter as significantly lower prices sparked a rush for bullion and jewellery. Quarterly figures released yesterday by the World Gold Council (WGC) revealed that domestic sales reached Dh4.3 billion (US$1.17bn), up from Dh2.8bn in the same period last year. Similar results were recorded across the region, with gold sales in Saudi Arabia up 51 per cent; in Egypt, 33 per cent; and in the other Gulf countries by an average of 42 per cent. Demand is also on the rise, with the Emirates experiencing a boost in tonnage sold by 22 per cent over the third quarter of last year. The third quarter is traditionally the high season for the region's gold and jewellery industry as it is a popular time for weddings, and this year it coincided with Ramadan as well as the Indian festivals of Dhanteras and Diwali. Jewellery demand in the Middle East has rebounded following a period of high gold prices and price volatility. Bullion fell 17 per cent last month, its biggest decline since February 1983 when it finished the month down 18.2 per cent. The price of gold ended last month at $720.35 an ounce, down 12 per cent this year and well below the record high of $1,030.80 an ounce struck in March. "In Dubai, which is the single biggest market in the UAE, the fall in the gold price coincided with the 'Dubai Summer Surprise," said Lama al Saheb, the WGC's head of marketing and public relations in the Middle East. "Buyers who pulled back in [the second quarter} due to concerns over the high gold price returned to the market." High and volatile gold prices during the second quarter of this year dampened demand across the region while driving revenues up, according to data released by the WGC. The UAE and Saudi Arabia experienced 11 per cent and 15 per cent drops in sold and invested quantities respectively, while both experiencing a significant increase in sales revenues on higher prices. Industry officials explain that banks that had been holding bullion in their portfolios began selling when cash liquidity was hit by the economic slowdown. As a result, more gold was coming on to the market, causing prices to drop dramatically. However, the plunge in the price of gold and jewellery to between Dh82 and Dh85 per ounce during the holiday season sparked unprecedented sales, causing many retailers in Dubai to experience stock shortages. "It is a good problem to have in that it is better that they experience a shortage based on too much sales than if nobody is buying," said Swapna Nair, the general manager of Dubai Gold and Jewellery Group. "Shortages might lead to a slight increase in the price of jewellery - which is also good now that the holiday rush for Diwali and Ramadan are over and demand might drop slightly." Internationally, gold revenues reached a quarterly record of $32bn in the third quarter as investors sought refuge from the global financial meltdown, and jewellery buyers returned to the market due to lower gold prices. Global gold consumption figures also showed retail investment demand up by a massive 121 per cent to 232 tonnes, with strong bar and coin-buying reported in Swiss, German and US markets. email@example.com
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