Gold sales have jumped by 400% following the recent price plunge. The consumption pattern reflects typical Indian preferences.
DUBAI(BullionStreet): Indians and Philippinos led gold buying frenzy in the UAE when prices plunged in mid April, analysts said.
They added that Dubai gold trade has experienced its best 10 days of trading in 12 years with sales volumes up three-fold since the gold price crash. This has left the gold souks very short of gold.
Dubai gold dealers suffered their worst during the price plunge as gold prices lost more than 10 per cent in a single day and more than $ 200 an ounce in two days, they said.
Retailers are paying record premiums to restock. Gold dropped as low as $1,332 an ounce and prices have now rebounded to $1,424 and look to be heading higher.
UAE witnessed frenzied buying of gold jewellery at different shops across the country especially by expatriates, particularly those from India and the Philippines, have a long tradition of hoarding gold jewellery as a form of investment or personal saving.
Indian consumers in particular scrambling in the stores to buy any quantity they receive as majority of them in Dubai do not prefer paper gold in the form of exchange traded funds (ETFs).
Dubai merchants say sales have jumped by 400% following the recent price plunge. The consumption pattern reflects typical Indian preferences.
Though gold coins and bars are amongst those items that are hot selling, the bulk of the purchasing since the prices fell has been in the form of jewellery.
Expatriates in the UAE believes that storing jewellery offers more security than keeping cash in the bank and is an effective hedge against inflation.
The World Gold Council that follow closely the reactions of the market has already seen a shortage of bullion and coins in Dubai.