Dubai: Gold imports to Dubai dropped 14.5 per cent last year to $29 billion (Dh106.6 billion) from the year before, in line with the decline in global trade amid economic worries. However, exports were up.
The Dubai Multi Commodities Centre Authority (DMCCA), the government established free zone trade authority, yesterday said 576 tonnes of gold were imported into Dubai in 2009, and exports hit 403 tonnes, an increase of nine per cent over the year earlier.
Earlier this year, the World Gold Council (WGC) said the region's gold demand fell 28 per cent to 250 tonnes in 2009 as high gold prices drove demand down in the fourth quarter.
Jewellery sales in the region, forming the bulk of the total, equalled 51 tonnes, with Saudi Arabia and the UAE experiencing the highest sales. While the kingdom's consumption hit 17.1 tonnes, the UAE sold 16 tonnes in the fourth quarter.
"Jewellery sales in the UAE, and Dubai in particular, are continuing to suffer under the pressure of fewer expatriates, the [global] economic downturn and problems in the property sector.
"Lower than normal tourist numbers have also continued to impact, although these showed signs of improvement in the latest quarter," WGC's fourth quarter report said.
Meanwhile, Ahmad Bin Sulayem, executive chairman of DMCCA, believes the city's trade figures are "impressive."
"The past year witnessed a period of high price volatility with record-high prices. Despite these factors, Dubai sustained the all-time high value of gold trade," he said.
In 2009, gold prices broke the record level of $1,200 per ounce before falling to an average of $973 per ounce.
More than 130 countries served as gold import partners into Dubai in 2009. Looking forward, the gold demand trend is picking up.
Since last November, the volatility of the US dollar has generated more trust in gold investment worldwide, analysts say. After the Dubai Shopping Festival handed out about 650 kilogrammes of gold in raffle draws, demand has also jumped for re-exports, especially to the Indian market.
"Mainly in the Middle East, fund managers are looking at the Dubai market because it has its own brand name for gold. People trust that," he said.
Meanwhile, fund managers are banking on gold to improve their books.
"Fund managers, banks and treasuries are looking at taking deliveries [of gold] to show good financials as the year-end is happening," said Sajith Kumar P.K, analyst with commodity broker JRG international.
"They [fund managers] are more cautious and trust in gold now, apart from equity and bonds," P.K. said.
