Gold sales down 10 pct in April- retailers
Dubai, Abu Dhabi retail gold demand down around 10pct; Retailers see greater interest in silver
May 11, 2011 4:44 by p.deleon
Retail gold sale volumes in Dubai and Abu Dhabi dropped by around 10 percent in April year-on-year as high prices deterred consumers and turned their interest to silver, retailers said on Wednesday.
Retail gold sales in Dubai, branded as the city of gold, may have lost their lustre as high prices of the precious metal kept buyers at bay.
“People only buy gold on a need-to basis these days, for weddings or special occasions when they really have to,” said one gold salesman in Dubai’s old gold souk.
“Otherwise now the demand is stronger for retail silver,” he added.
April sales volumes were also down around 10 percent in Abu Dhabi, capital of the UAE, retailers said.
“Sales volumes are a little lower in April compared to last year, but the value is sales is higher because of the price,” said Tushar Patni, director of Ajanta Jewellers, one of the largest retailers in the emirate.
On Wednesday spot gold rose half a percent to $1,521.96 an ounce in a fourth day of gains after falling more than 4 percent last week.
From the investment side, volatile prices of the yellow metal drew in Gulf traders’ interest, said Ramkumar Chandrasekharan, an analyst and trader at Al -Bogari Islamic Gold DMCC in Dubai.
“Steep sell-offs followed by steep recoveries always flush out the retail traders from the market, and the position gets shifted from weaker hands to stronger hands,” he said.
“Unsettling and volatile move could be seen soon, as we see gold is ascending in a grinding manner,” he said, adding that whenever prices rise, then there are sales.
FROM GOLD TO SILVER
Spot silver jumped more than 2 percent to $39.24 an ounce on Wednesday, rebounding after losing more than a quarter of its value last week in the worst week for commodities since 2008.
Anecdotal evidence suggests many retailers have introduced more silver products into shops as a means of boosting sales.
“The volumes of silver buying are much higher than gold in the retail sector mainly because silver is cheaper, and in the past six months the price of silver has doubled, so there are bigger profits to be made,” said Patni.
In March, the World Gold Council shut down its office in the UAE, citing a strategic review of its operations.
But traders said it had to do more with the fact that rising prices had badly hit the retail industry in the country.
By Sara Anabtawi(Editing by Jane Baird)