JEDDAH, 20 February — Gold demand was strong in the Kingdom in 2001, rising by three percent over the previous year to set a new annual record despite the loss of consumer confidence and volatility of gold markets worldwide in the aftermath of the Sept. 11 attacks on the United States, the World Gold Council said.
The figure is 27.6 percent more than overall demand in all other Gulf countries for the year. The combined annual demand for the other GCC states was 165.2 tons.
A fall on tourism and Umrah pilgrims resulted in a reduction in jewelry purchases through much of the fourth quarter. The holy month of Ramadan when Umrah travel picks up is usually a strong season for gold sales in the Kingdom. However, sales of coins and bars were stronger, said the WGC statement. As in the rest of the region, there was a swing to gold investment in the last three months of 2001.
Another key factor that influenced the market was the retraction of a 7 percent cut in import duty on gold and jewelry.
The erratic pattern in the rest of the year was followed by a strong rise in final quarter demand bringing annual demand to 228 tons. This was three percent higher than 2000, itself a strong year, and also beat the previous record of 225 tons set in 1992.
World gold demand in 2001 was 3.235 tons, two percent below year-earlier levels. Jewelry demand at the start of the fourth quarter was largely affected by the economic slowdown, loss of consumer confidence and the volatility of the gold market in the aftermath of the Sept. 11 attacks.
The council said overall gold demand in the Gulf states (except Saudi Arabia) for 2001 was 165.2 tons, 4.8 percent higher than the previous record for 2000.
“Closer inspection reveals that demand in the Gulf states was initially affected in the aftermath of the Sept. 11 attacks. Demand, however, picked up in November and December with total quarter demand ending just one percent higher than a year earlier,” said Osama Al-Wazir, WGC manager for Saudi Arabia and Gulf.
