by Summer Said on Monday, 01 September 2008
Gold jewellery sales in Abu Dhabi soared 300 percent in volume and almost 250 percent in value in August from a year earlier after the metal dropped to nine-month lows, the emirate's industry group said on Monday.
"It was the best month the market has seen in almost 30 years and it compensated for any drops we have seen earlier this year," Abu Dhabi Gold and Jewellery Group Chairman Tushar Patni told Reuters.
"We had never expected that if gold fell below $800 an ounce we would see a 300 percent increase in volume and 250 percent in value, especially as many buyers are abroad on holiday."
The Gulf Arab emirate's gold demand was steady in July, as many buyers, mainly from the Indian subcontinent, headed home for the summer holidays.
Gold dropped to a nine-month low of about $773 an ounce in mid-August before bouncing back, but it still has been trading far below its all-time high of $1,030.80 an ounce, hit in March.
The precious metal was trading around $827 an ounce in Europe on Monday.
"Many people took advantage of lower gold prices to buy all the jewellery they wanted for Ramadan and the Eid or because they want to keep it until prices rise again to make profit," Patni said.
The lunar month of Ramadan, which this year coincides with September, is a time when devout Muslims refrain from all food and drink during daylight hours. It ends with the Eid, or feast, during which many couples marry.
"Many Indian buyers followed the same logic and bought gold for Diwali in August," Patni said.
Hindu weddings normally are held between September and November, and Diwali, the important Hindu festival of lights, is in October.
Tax-free jewellery shopping in the United Arab Emirates - a seven-member federation that includes Abu Dhabi and Dubai, known as the "City of Gold" - lures many Gulf and Western tourists.
Demand in the Gulf Arab country fell 10.7 percent to 26.6 tonnes in the second quarter of 2008, the industry-funded World Gold Council said last month. (Reuters)
