Dubai: Gold buying activity may have declined recently with consumers taking home less amount of jewellery, but merchants remain upbeat about their business.
According to the latest figures, per capita consumption of gold in the UAE has actually declined by a few grams. Whereas in 2015 the average person took home more than 6 grams of gold, the demand dipped to 5 grams in 2016.
A major gold jewellery retailer said on Wednesday that the local market is still outperforming its peers in terms of domestic demand.
Karim Merchant, managing director and CEO of Pure Gold Jewellers, pointed out. though that global consumption of the precious metal has been subdued, particularly in 2016.
“Most mature markets faced a downturn in the gold retail sector. Uncertainty over US policies and refugee crisis affected the world economy and repercussions were felt across the board,” Merchant told Gulf News.
“[But]. compared to other mature markets, the UAE has outperformed and I believe the outlook for gold jewellery in the long term is very strong.”
According to the World Gold Council, demand per capita in the UAE dipped from 6.3 grams in 2015 to only 5 grams in 2016. Per capita demand in the country, however, is still the highest in the region.
The second-biggest spender on gold in terms of per capita demand is Kuwait at 3.1 grams per person, followed by Saudi Arabia at 1.9 grams and Egypt at 0.3 grams.
The country’s consumption of gold jewellery in the second quarter of 2017 reached 12.2 tonnes, down by 15 per cent from the first three months of the year. However, when compared year-on-year, the latest demand figures show a slight uptick of 9 per cent.
The world market is witnessing a strong performance of the precious metal, which has recently breached the $1,300 price level, due largely to rising tensions sparked by North Korea.
The bullion’s rally has pushed local prices to a premium, with 24K gold retailing in Dubai at Dh161.75 per gram on Wednesday, up by nearly Dh23 per gram from January 1, 2017.
Precious metal prices in the global market held steady on Wednesday, with spot gold nearly unchanged at $1,338.10 per ounce by 0641 GMT, according to Reuters.
The bullion is also getting support from expectations that that the US Federal Reserve might delay interest rate hike adjustments due to low inflation.