SHARJAH, 1 February 2005 — Saudi Arabia’s gold consumption went up by 4.5 percent to 139 tons in 2004 from 133 tons in the previous year, and sales of the yellow metal in the Kingdom rose by 18 percent to $2.1 billion in 2004 from $1.8 billion in 2003, according to the World Gold Council (WGC) regional office in Dubai.
The WGC said the annual gold consumption in terms of tonnage in the six Gulf Cooperation Council countries saw an average increase of six percent in 2004 when compared with 2003 — from 273 tons to 290 tons.
Sales in the GCC countries rose by an average 19 percent to $4.1 billion in 2004 when compared with $3.7 billion in 2003 despite an 11 percent increase in price, said the council.
In the UAE, 96 tons of gold were consumed during 2004 compared with 88 tons in 2003. In terms of sales, the UAE posted $1.5 billion in 2004 compared with $1.2 billion in 2003, registering a 25 percent increase.
Other figures cited by the council showed that gold consumption in Bahrain was 13 tons in 2004 (12 tons in 2003) worth $197 million ($163 million in 2003); Kuwait 28 tons (26 tons in 2003) worth $425 million ($354 million in 2003), Oman 8.1 tons (7.7 tons in 2003) worth $123 million ($105 million in 2003) and Qatar 6.14 tons (six tons in 2003) worth $93 million ($82 million in 2003).
Saudi Arabia and the UAE are among the top 10 gold consuming countries in the world.
The UAE is also the second top import destination of Italian and Turkish gold jewelry after the US.
Moaz Barakat, managing director of WGC in the Middle East, Turkey and Pakistan, said in a statement that the increased gold consumption in the GCC countries despite the increase in gold price over the year meant that price does not seem to have deterred jewelry purchasers.
“Indeed, reports from the main consuming markets indicate that buyers are now accustomed to price in excess of $400 per ounce, and that demonstrated consumers’ high affinity toward gold and gold jewelry,” he said.
He attributed the improved performance to the increase of tourists during the holiday seasons in the UAE where 70 percent of the UAE tourists visit the gold souk. Another factor is the introduction of gold shopping festivals in countries like Kuwait and Bahrain that boosted the off-take.
He said the Dubai Metals and Commodities Center has enhanced Dubai’s image as the “city of gold” through establishing a free zone that made Dubai a hub to gold and other precious metals manufacturing and trading.
The year 2005 will witness an increase in jewelry manufacturing that will be based mainly at the center.
Despite the increase in gold price, the economic and political concerns only had a positive impact on the gold market that increased the retail investment purchases, said the council.
The investment in gold as a financial asset has increased in line with the global trend. Early indications for the year 2005 throughout the region are for further strong growth, said Barakat.
