19 per cent increase in UAE gold sales in the second quarter (April, May, June) of 2005 as sales figures reach Dirham 1.8 Billion

On the other hand, the UAE gold consumption in terms of tonnage experienced a 10% increase in the same period. The gold jewellery consumption increased by over 9% from 26.4 tonnes in 2004 to 28.9 tonnes in 2005, while retail investment (bullion coins and bars) consumption increased by 20% from 1.5 tonnes in 2004 to 1.8 tonnes in 2005.

Moaz Barakat, Managing Director for the Middle East, Turkey and Pakistan commented, 'Many factors have led to the improved performance in the second quarter of 2005. For example, the strong oil price provided a background of consumer optimism in the UAE, Saudi Arabia and the rest of the Gulf States. The UAE also benefited from the increase in the number of tourists, as well as a booming economy and sustained promotions. The Dubai Summer Surprises festival which started late June also helped to keep demand on gold high during the summer holiday period. Early indications for Q3 throughout the region are for further strong growth.'

Barakat also added that jewellery demand in Saudi Arabia increased by 18% in Q2 of 2005 compared to the same period of Q1. Government measures, including a reduction in customs duty and the easing of the Saudisation programme have started to boost demand. The relaxation of the Saudisation rules was of particular benefit, easing the restraints many outlets faced in finding adequate numbers of trained Saudi staff.

Despite any situations around the globe, the gold market remains healthy and growing in the UAE and the Gulf. For instance, gold sales in Saudi Arabia increased by 28%. Other countries in the gulf witnessed an increase in gold sales by 17%. The increase in sales in the Gulf demonstrates the high affinity to consumers towards gold and gold jewellery.