Indian Buyers Help Lift Gold Sales in the Middle East
Source: Mineweb, Shivom Seth (5/24/11)
"Indian expats don't just gawk at the glittering gold souks in Dubai. . ."
Indian expats don't just gawk at the glittering gold souks in Dubai. Analysts and traders insist expatriate Indians living in the Emirates are helping push up sales to new heights for the precious metal.
The Middle Eastern market, which has seen sustained interest in large denomination bullion bars from high-net-worth individuals, has a new ally, as expats are fast becoming an important consumer segment.
Gold souks and bourses in the Middle East are now targeting non-resident Indians (NRIs) and Indian expats by offering them loans and discount schemes to feed their gold bar frenzy.
Traders believe that Indian consumers helped boost sales in gold bars and coins in the Middle East, which has seen 10% growth in bars and coins in Q111, as against a 16% slump in gold jewelry sales during the same period.
Saudi Arabia has also seen 6% rise in demand for bars and coin, even as jewelry demand has fallen by 19%. UAE, on the other hand, registered 21% growth in investment in bars and coins, while jewelry demand grew by 5%, according to a report by the World Gold Council.
"The numbers have a story to tell. It is not just rich customers in Dubai or Oman who are doing the buying. Indian expatriates in the UAE have been rushing to stores to buy gold on several occasions and especially during religious and festival times,'' said Vijayan Shekhar, bullion analyst at a foreign brokerage house in Mumbai.
There has also been a massive rise in volumes on the Dubai Gold and Commodity Exchange—the volume of traded commodity contracts had increased by 111% year-over-year in April. "This is clearly indicative of the growing importance of the Asian markets, since many of the investors were of Indian origin,'' said bullion analyst Prathimesh Shah.