Gold imports in Dubai are expected to remain high in future despite highly volatile prices of the metal due to spurge in demand and rising purchase by Indian and Arab visitors.
Moaz Barakat, Managing Director, World Gold Council, the Middle East, Pakistan and Turkey, said that the import of gold in Dubai is expected to remain high in spite of highly unstable prices of gold, as reported by Select Property.
In 2007, Dubai imported 559 Tons of gold, primarily due to high demand for the metal in the country whereas the exports touched 287 Tons. Furthermore, Dubai is known worldwide as “the City of Gold” with the largest number of jewelry shops in the world. The industry’s turnover in 2007 was around $35 Billion, 20% of $173 Billion traded by the global jewelry industry last year.
The strong imports of gold by Dubai are mainly accredited to high demand for the metal in the region. People are creating the strong demand for gold in Dubai, as they are wealthier than those in other regions in the world. They have enough money to spend on accessories, particularly gold that shows their status. Another important reason for strong growth in the Dubai gold market is tariff-free gold jewelry available in shopping malls and gold souks, attracting visitors from India, Gulf and Western countries. Consequently, Dubai has emerged as the leading market for gold globally.
Also, foreign visitors in Dubai buy over 60% of gold because they get gold at low prices than their own countries. So with rise in the country’s tourism industry, the demand for gold is expected to mount further and subsequently, the import of gold would rise irrespective of unstable prices.
Furthermore, people in this region are versatile and adjust according to the prices very quickly, while in terms of investment, local investors are increasingly investing in the industry, as they are confident of good returns in future. This is expected to have a positive impact on gold imports in Dubai.
A Research Analyst at RNCOS said, “The gold and jewelry industry of Dubai is being boosted by escalating demand for gold in India and Arab countries. As a result, it is offering vast growth opportunities to gold traders in the region. Gold traders can take advantage by selling their jewelry at higher current prices and also get advantage of tax-free trade.”
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