Abu Dhabi: Higher prices and low buyer turnout in August saw retail gold sales plummeting by 40 per cent in Abu Dhabi, the worst sales this year, retailers said Thursday.
Prices of the yellow metal have been boosted by institutional funds seeking a safe haven for their assets during the global economic crisis.
The average price of 22 carat gold in August was Dh107 a gram compared with Dh82 in August last year and Dh105 in July this year.
"The market was very bad last month, almost 40 per cent down. It is always like this because it is holiday month with no buyers," said Tushar Patni, director of Ajanta Jewellers.
"Gold prices were also higher and usually during Ramadan we see less buying. Last year was an exception because in August prices were really low," he said.
The average price of gold in August last year was Dh82 per gram. Expatriates go on annual holiday in July and August.
"Jewellery sales were poor, we expected that. But gold became expensive and those who wanted to buy must have postponed purchases," said the manager of Joy Alukkas Jewellery that has three outlets in Abu Dhabi.
Sales are expected to be flat in September if prices continue to be on the high side said Patni. Price of gold touched Dh110 a gram yesterday.
Spot gold has risen by more than a quarter to about $980 (Dh3,600) an ounce yesterday from a low of $773.90 in August last year. In October it dipped to a one-year low of $680.80.
Retail gold prices move in line with spot prices that have eased slightly this year as investors switched from gold to equities due to the recovery in stock markets.
Tax-free jewellery in the UAE's gold souqs and shopping malls draws Gulf, Arab, Asian and western tourists.
Abu Dhabi has some 85 gold shops and its own jewellery manufacturers. Imports, however, make up almost 60 per cent of all jewellery sold at retail outlets.
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