We’ve focused a great deal on gold demand in China, India, and Eastern Bloc countries over the last several months, but people in these nations aren’t the only ones buying gold. Demand for the yellow metal is also robust in the Middle East due to what analysts call “safe haven buying.”
Despite general sluggishness in the retail sector, gold jewelry sales surged in the United Arab Emirates during January. According to Gulf News, retailers in Dubai sold upwards of 8 tons of gold jewelry last month. This rivals sales rates from January 2015, despite a much more difficult environment for retailers this year. Abdul Salam K.P., a member of the board at Dubai Gold & Jewellery Group, pointed to gold sales as one of the few bright spots for UAE retailers:
There seem to be a lot of ‘gold as safe haven’ buying taking place right now. To retain the January 2015 volumes is in itself a victory of sorts for the jewelry trade. There’s been a shake-up of consumer confidence by what’s been happening in the economy, and retail sector in particular has been deeply impacted. In this context, gold purchases seem to one of the few silver linings the retail sector has been seeing. With these sentiments driving the purchasing, shoppers were willing to overlook the fact that gold prices had actually inched up since January 1.”
Analysts say about 70% of the purchasers were resident shoppers, with visitors making up the balance of the sales.
Salam said, “January’s sales tally for the local gold trade need not be an exception,” and indicated he expects continued buying support in the upcoming months.
Demand for gold in India continues to be robust. According to the Economic Times, Indian gold imports more than doubled in December, hitting $3.8 billion. The country’s jewelry and investment demand increased 6% to 890 tons in the fourth quarter of 2015. In 2014-2015, gold ranked as the third-largest commodity imported into India, behind only oil and electronics.
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