Local demand eases back but business from Indian visitors expected to rise...
GOLD BUYING in the United Arab Emirates is slowing from strong levels, according to local dealers. But India's recent clampdown on gold imports is expected to boost demand amongst visitors from the sub-continent.
After seeing a frantic round of gold buying when the price tumbled in mid-April, which continued for most of May, gold's popularity seems to have come off in June.
"The drop in retail demand
has more to do with continued uncertainty over where gold prices are headed next," says Shamlal Ahmad, director of international operations at the Dubai offices of Malabar Gold, one of India's largest jewelery manufacturers and retailers.
But thanks to the gold import duty rise in India, plus 4% sales tax on gold in the subcontinent, "there is [now] 12% difference in the cost of buying gold
from the UAE and India," he tells Emirates 24/7.
Other gold and diamond jewelers say they are also going ahead with their expansion plans in the Middle East, the news-site reports, because of increased customs duty in India.
"Even if customers stop buying gold in India," agrees Sunny Chittilappally, chairman of the Dubai Gold & Jewellery Group, "they will not stop buying gold
from the UAE."
Inside the United Arab Emirates, however, gold transactions have dropped so far this June, as buyers hope prices will fall lower again, dealers say. Retail gold buying seems to be at the lower end of the usual range, equivalent to around $1,000 a time.
"The street sentiment is that from current levels gold will find it quite difficult to move up," reckons Cyriac Varghese, general manager at Sky Jewellery, a Dubai-based jeweler with outlets across the Middle East.