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Abu Dhabi's gold retailers face slowing sales-trade
Released on - Thursday,05 November , 2009 -17:07 11
ABU DHABI - Gold sales in Abu Dhabi fell by up to 30 percent in October on the year, as higher prices continued to keep consumers at bay, retailers said on Thursday.
The price of 22 carat gold averaged 118 dirhams ($32.15) per gram in October versus 108 dirhams in the previous month.
"If not for Diwali, it would have been very bad. The price was high, average around 118 dirhams, so buyers stayed away," said Tushar Patni, director, Ajanta Jewellers.
Diwali is the annual Indian festival when gold purchases peak. Indians are among the leading buyers of gold in the United Arab Emirates of which Abu Dhabi is the capital.
"Business was slow last month, even regular shoppers have disappeared. The only hope is if prices go down," said C.K Sajid, manager at Joy Allukas Jewellery that has three outlets in Abu Dhabi.
Traders expect turnover to be low in November if prices continue to surge.
Spot gold (XAU=) reached around $1,087.70 an ouce on Thursday. The yellow metal rose to an all-time high of $1,097.25 an ounce on Wednesday after India's central bank bought 200 tonnes of the precious metal from the IMF.
"We expect another slow month because November began with a big rise in prices. Hopefully, there should be some buying for the festival of Eid end of the month," said Patni.
Some retailers have started promotions to boost sales of diamonds. "A few retailers have come up with novel offers for diamond jewellery to make up for the poor sales of gold," said a retail manager, asking not to be named.
Branded as the City of Gold, Dubai saw retail sale volumes of the metal recover in October as tourists returned to the market.
The majority of sales in Duabi come from visitors, while Abu Dhabi relies on local demand.
Tax-free jewellery in the UAE's gold souks and shopping malls draws Gulf, Arab, Asian and western tourists.
Abu Dhabi has some 85 gold shops and its own jewellery manufacturers. Imports, however, make up almost 60 percent of all jewellery sold at retail outlets.
Source: Reuters