Arab Today, arab today gold buyers shift from jewellery to bars
Last Updated : GMT 21:26:48
Arab Today, arab today
Arab Today, arab today

Gold buyers shift from jewellery to bars

Arab Today, arab today

Arab Today, arab today Gold buyers shift from jewellery to bars

Dubai - Arabstoday

The recent violent volatility in gold prices is disrupting traditional buying patterns in Dubai with customers moving from jewellry to bullion as they renew a focus on the yellow metal\'s investment potential, a trend that is prompting more city jewellers to stock gold in the form of coins and bars. Dubai, known as the city of gold, is a long-established market for bullion and wholesale and retail jewellery. Its trade is fuelled by demand from India, the world\'s number one gold consumer, and domestic consumption which, at 19 tons in the second quarter of 2011, makes the UAE the second-largest consumer of gold jewellery and bullion in the Middle East after Saudi Arabia. Whereas traditional retail demand was for jewellery, there has been a change in buying patterns, said Pradeep Unni, senior relationship manager at Richcomm Global Services, a Dubai-based commodity services company and a broker of the Dubai Gold and Commodity Exchange, or DGCX, which trades a gold futures contract. \"Earlier while women would buy gold in the form of jewellery, now one can see men, finding themselves with a bit of spare cash, go into a jewellery shop and buying ten-tola bars,\" he says. A ten-tola bar, called TT bar in the trade, is a traditional Indian measure of weight that equals 3.75 ounces. \"Sales of gold coins and TT bars are up 30-40 per cent on year as they aren\'t as expensive as the kilo bar,\" said Unni. Cyriac Varghese, general manager of Sky Jewellery in Dubai, has noticed a similar trend. \"When prices went up in early August, there was a drop in jewellery business and people who had spare cash moved into gold coins and bars as they thought the price would rise further,\" he said. The gold price has soared 35 per cent since January 2011 to above $1,900 (Dh6,977) per ounce in September as investors sought refuge in its safe haven status in the face of an uncertain global economic outlook and concerns about the health of the US dollar. Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre, said those who are looking to invest in gold now are \"those who don\'t have gold in their portfolios; people who think that in addition to having a bank account, they need to have gold\". The Dubai Multi Commodities Centre is one of the backers of the DGCX, and helps promote the local gold trade. The World Gold Council, an industry organisation, says demand for physical bars and coins in the UAE rose 6 per cent in the second quarter of 2011 from the previous year period, while demand for jewellery was down 1 per cent in the same period. If the trend continues, it could suggest that demand for gold in Dubai is becoming more speculative, local jewellers said.  

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