UAE gold sales plunge 15% in Ramadan

Dubai :  Retail gold demand volumes in Dubai and Abu Dhabi dipped by around 15 per cent in August on the year, as Ramadan led consumers to focus more on food purchases, traders said yesterday.

"Ramadan is all about food and not about buying jewellery that's why we saw a dip of around 15 percent in August," said a jewellery trader at Mansuk Jewellers in Dubai's old gold souk.

"Last year we had Ramadan start closer to the end of August and that is also why the sales are lower on the year," said Tushar Patni, director of Ajanta Jewellers, one of the largest retailers in the emirate capital of Abu Dhabi.

Retail sales represent the bulk of gold demand in the Gulf region because the investment market is in its infancy. There are no official monthly figures in the UAE, and views gathered by Reuters are anecdotal from traders at the gold souks.

Spot gold gained $2.8, or 0.2 per cent, to $1,246.30 an ounce yesterday, after a two-month high of $1,254.65 on Wednesday, which is just $10 below the all-time high.

Traders are expecting sales to accelerate during the first two weeks following Ramadan, said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai.

"This pick up in demand will more than make up for the losses encountered over the past weeks," he said.

Overall, retail gold demand volume in the Middle East during the second quarter of the year was mixed, with Saudi recording a five per cent rise on the year, while the UAE fell by 15 per cent, according to a report by the World Gold Council.

Gold demand in Saudi was driven by strong domestic consumption, and UAE demand had tailed off in response to high prices during the second quarter, the WGC report added.