Retail gold demand volumes in Dubai and Abu Dhabi were marginally up in June on the year because expatriates going on holidays had more disposable income to buy jewellery than a year ago, retailers have reported.
“During June and July many people travel for the summer and buy gold as gifts, and this year people had a little more money to spend compared to last 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 United Arab Emirates, and views gathered by Reuters are anecdotal from traders at the gold souks.
Spot gold prices reached around $1,211.45 on Thursday, down from the record high of $1,248.95 hit in mid-May when worries about euro zone debt encouraged investment in gold, seen as a safe-haven asset.
“The prices did come down a little bit which also encouraged people to start buying a little bit more,” said a salesman from Hem’s Jewellery in Dubai’s old gold souk.
After the first half of August, retailers expect gold sales to slow down again as Ramadan, the holy month when Muslims fast from sunrise to sunset, starts.
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