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Overall gold demand rose 319 per cent from 2.1 metric tons to 8.8 metric tons during the comparative period
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Demand for gold bars and coins in the UAE rose 71 per cent year-on-year from 0.8 metric ton to 1.4 metric tons
Demand for UAE gold jewellery has vaulted 461 percent to 7.3 metric tons in the second quarter as compared to 1.3 metric tons in the same period last year, as buyers splurge owing to Covid vaccination and return of tourists, resulting in higher purchase of the precious metal jewellery.
However, quarter-on-quarter gold jewellery sales fell by a metric ton, according to World Gold Council data released on Thursday.
Overall gold demand rose 319 per cent from 2.1 metric tons to 8.8 metric tons during the comparative period while gold bars and coin demand in the UAE rose 71 per cent year-on-year from 0.8 metric ton to 1.4 metric tons.
The council said demand in the UAE increased 461 per cent year-on-year but was 21 per cent below 2019 due to high gold prices and expat sentiment having been soured by India’s second Covid wave difficulties. When compared to 2019 figures, tourist purchases were also impacted, it said.
As compared to second quarter last year, the UAE market is now open for passengers from more countries, resulting in increased buying of gold jewellery.
The US dollar gold price averaged $1,816.5 per ounce during Q2, six per cent higher than in Q2 2020.
Globally, overall gold demand declined in Q2 by one per cent year-on-year to 955.1 metric tons while bar and coin demand stood at 243.8 metric tons, an increase of 56 per cent year-on-year, achieving its best quarter since 2013.
“As the global economic recovery continues, we have been encouraged to see consumer demand returning, with strong year-on-year growth in jewellery,” said Louise Street, senior markets analyst at the World Gold Council. “But investment is a more complex picture. Despite evidence of strategic buying from both individuals and institutions, tactical investors had a more mixed impact in the first half of the year. This was partly seen through gold ETFs where inflows in the second quarter only slightly dampened the effects of the preceding quarter’s sell-off.”
The Council projected that jewellery demand could be in the range of 1,600 to 1,800 metric tons for the year, well above 2020 levels but below the five-year average.
“Continued global economic recovery should support consumer demand for global gold jewellery throughout 2021, although continued Covid disruption in some markets – most pertinently India – will provide a headwind. While pent-up demand could serve as a boost, a strong price recovery in H2 could push jewellery demand towards the lower end of the range,” it said.