UAE's gold jewellery demand likely to grow 20% this year

Dubai: The UAE's gold jewellery demand is likely to grow 20 per cent this year as consumers are willing to pay higher prices, said Moaz Barakat, managing director of the World Gold Council yesterday.
Speaking on the sidelines of a press conference to announce the fifth Dubai City of Gold Conference to be held on April 22-23, Barakat said in quantitative terms the gold jewellery demand this year is likely to be more or less at the same level as last year. However, he said, first quarter trends suggest that in value terms it will be higher by about 20 per cent.
According to a recent survey by London-based industry consultant GFMS bullion imports into the Middle East fell almost 50 per cent last year. A surge in locally generated scrap gold, coupled with a sharp decline in domestic jewellery fabrication, resulted in a drop in fresh bullion imports into the Middle East in 2006. GFMS attributed recycling of gold jewellery to the significant fall in bullion demand from the region.
Festival sales
Industry analysts said the demand situation is improving as consumers have already factored in the increase in gold prices and the festival sales indicate that consumers are willing to pay higher prices.
"The demand situation in the region is fast improving. During the past six months there have been significant improvements in both consumption (jewellery) demand and investment demand for gold," said Alison Burns, Regional Head of Precious Metals, for Standard Bank, Middle East and North Africa.