JEDDAH, 19 November 2007 — Gold demand across Saudi Arabia has marked a significant increase in the third quarter of the year. It rose by 19 percent in the Kingdom, the fifth largest jewelry market, compared to the same period in the previous year, according to Dubai-based regional office of World Gold Council’s Q3 report released yesterday. Net retail investment in the Kingdom, which is witnessing an economic boom, was up by 17 percent.

The overall demand for gold in the Middle East and also globally remained strong despite the metal maintaining an uptrend. Last week, spot gold hit a 28-year high of $845.40 an ounce, trading just $5 below its record high set in January 1980.

Global demand for gold reached a new record in dollar terms at $20.7 billion, up 30 percent higher than Q3 2006. The strong growth seen in the first six months of 2007 thus continued in the latest quarter but there was a shift in the pattern.

The current campaigns by WGC and several gold trading entities and gold committees have been mentioned as being particularly successful. Furthermore, the reduction in customs duty on imported jewelry from 12 percent to 5 percent, which took effect in March, is helping to improve the range of products on offer as is the spread of trade outlets, the WGC said. Promotional spending by the trade has risen and the latest gold shopping festival attracted a 20 percent increase in the number of participants. An increase in both jewelry off-take and total consumer demand in Q3 also reflects the low level of purchasing in 2006, when demand was hit not only by the volatile gold price but also by the impact on wealth levels of the stock market crash.

Total gold demand in Saudi Arabia in Q3 2007 was 34.4 tons.

Overall demand in the Middle East region notably Saudi Arabia, UAE, Kuwait, Bahrain, Oman, Qatar and Egypt marked a 13 percent increase in consumer demand to 93.2 tons in the region as a whole compared to year earlier when jewelry demand increased by 14 percent and net retail investment rose by 5 percent. In dollar terms this was a 24 percent increase, which was due to strong economies in the Arabian Peninsula.

Demand was strong in the UAE, which also continued to enjoy a booming economy, in Q3. Total consumer demand was 10 percent above as compared to year earlier and jewelry demand was 11 percent higher. This was due to the success of Summer Surprises Festival that brought in an increased number of tourists, sharply helping to increase the jewelry demand. Total gold demand in the UAE in Q3 reached 26.3 tons.

In Kuwait, Bahrain, Oman and Qatar total demand was 11.2 tons — a total increase of 3 percent in tonnage year-on-year. In Egypt, recovery continued with jewelry demand 15 percent higher than a year earlier. Demand in Turkey reached a further record in Q3, where net retail investment was itself a third quarter record while gold jewelry demand for the quarter was the second highest quarter ever.

The figures, compiled independently for WGC by Gold Fields Mineral Services Limited (GFMS), showed that jewelry demand was also strong through the quarter, but was heavily impacted in key markets in September as steep rises in price deterred buyers. Despite this, jewelry demand rose by 6 percent in tonnage terms over Q3 2007 and by 16 percent in dollar terms. Total world demand reached 947.2 tons.

Institutional investors’ Investment & Gold-Backed Exchange Traded Funds (ETFs) became much more active in Q3, at 138 tons for ETFs and similar products only, a quarterly record, beating even Q4 2004 (113.4 tons) when the largest ETF was launched in New York.

In contrast, net retail investment was relatively weak. It fell by 1 percent from year earlier levels, in tonnage terms to 102.7 tons and increased by 9 percent in dollar terms reaching $2.2 billion, compared to Q3 2006. Total identifiable investment demand (without ETFs & similar products) in Q3 2007 was 19 percent higher than year earlier in tonnage terms. In dollar terms, it rose 30 over the same period. Total identifiable investment (without ETFs & similar products) reached 240.7 tons.