10% Increase in UAE gold sales in first quarter of 2006 as sales reach 2.1 Billion Dirham

Due to the rise in gold price, the gold consumption in terms of tonnage in the UAE experienced a drop by 17% from 33 tonnes in quarter one of 2005 to 28 tonnes in the same period of 2006. This drop in the gold consumption in terms of tonnage was also witnessed in other parts of the region. Consumer demand in the UAE wasn't as strong in the first quarter of 2006 as it was in the same period of 2005 due to factors that the Country mourned the death of the Ruler of Dubai, Sheikh Maktoum bin Rashid al-Maktoum. The Dubai Shopping Festival, a key period for gold sales in the region, which usually takes place over this period and as a result was scaled down.

The first quarter in Kuwait followed a broadly similar scenario whereby a mourning period for the death of the Emir in January, negatively impacted consumer demand for gold.

As for Saudi Arabia, one of the factors affecting the gold market was the stock market crash in February 2006, affecting both consumer sentiment and the purchasing power of high-income individuals for the first quarter.

Commenting on the first quarter of 2006 results, Mr. Moaz Barakat - Managing Director of the World Gold Council in the Middle East, Turkey and Pakistan said: "The rise and the volatility of world gold prices affected the demand in the region, however; at the same time this led to an increasing value of peoples' savings of gold and gold jewellery. Some of them sold part of their gold bars, gold coins and gold jewellery to have a profit reached 100% in many cases due to high gold prices".

Mr. Barakat added:" It is worth mentioning, too, that consumers continued to buy gold jewellery of lower weights and paying higher prices because of their belief in the importance of gold and gold jewellery in their lives. Such conviction is backed by the increasing interest in gold from long-term investors regionally and world wide, who added gold to their investment portfolios aiming at balanced diversification and returns. Moreover, gold jewellery sales are expected to increase in quarter two this year".