x Abu Dhabi, UAE Thursday 20 July 2017

Gold rush as shortage of precious metal hits UAE

Gold buyers flock to UAE shops, after the price drops by roughly $100 per troy ounce, triggering short-term shortages of small gold bars, retailers say.

There is a shortage of small gold bars in the UAE as demand for the precious metal picks up. REUTERS/Petr Josek
There is a shortage of small gold bars in the UAE as demand for the precious metal picks up. REUTERS/Petr Josek

The dip in gold price has spurred January sales of the precious metal, even leading to shortages of small gold bars, UAE retailers say.

The gold spot price slipped from US$1412.63 (Dh5,188.59) per troy ounce at the end of December to a low of $1314.82 on January 28.

This whetted appetites of gold-buyers, and sales jewellery and bars in the UAE by as much as 25 per cent compared to the previous year, said Tushar Patni, the owner of Ajanta Jewellers in Abu Dhabi and a member of the emirate's Gold and Jewellery Group (CK).

"We saw about 20 to 25 per cent increase in sales, compared to the same time last year. Just because of the prices," he said.

___________________________________

Editor's Pick - Special Report / Egypt - the economic road back.

___________________________________

Mr Patni said the surge in demand had depleted his reserve stocks of small gold bars, and Abu Dhabi retailers had difficulties replenishing their stock.

"The worst week was last week," he said. "Practically, there was not anything available with any of the suppliers."

Sales of gold, a popular item for tourists and Asian expatriates who purchase the precious metal for investment, have been hampered over the past year as the price reached record highs above $1,400 per troy ounce.

In comparison, the average gold price in 2009 was just $972.35 on the London PM fix, data from the World Gold Council showed.

Spot gold was trading at $1,347 this afternoon.

Majid Karim, the managing director of Swiss Gold, a Dubai-based wholesale seller of gold bars, said that demand for bars surged by 18

to 20 per cent compared with December due to the lower cost. This led to short-term shortages last month of gold bars for roughly five days, he said.

Sunny Chittilapully, the vice chairman of the Dubai Gold and jewellery group and chairman of Chittilappilly Jewellers, said that gold jewellery sales rose by 30 to 35 per cent compared with December, due to cheaper prices and the Dubai Shopping Festival.

"There is a lot of tourists, and customers are more interested in buying gold because the price is very attractive," he said.

aligaya@thenational.ae

___________________________________

Follow our Business tweets - twitter.com/biznationaluae

___________________________________