The pace of gold sales in Dubai slowed in September as a rally in world market prices dented demand for the metal, a top industry executive said on Monday. With the lower volumes outweighing the rise in prices, the growth in the overall value of sales year-on-year was put at 13 percent in September, down from 26 percent growth in August.
"The sudden rise of gold prices has affected sales in September," Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group told Reuters. "We were expecting to see a 40 percent increase. But the market is re-adjusting to the current prices, and October will be a better month."
Spot gold rallied to $747.65 an ounce on last Monday, its highest level since January 1980. Concerns about the US economy and the weakness of the dollar encouraged investors to buy gold, often seen by investors as a safe asset. Dubai, known as the City of Gold, saw the value of gold sales in the third quarter rise 26 percent on the year, Abdullah said.
Dubai is a long-established market for gold bullion and jewellery, wholesale and retail, fuelled by strong demand from the Arab world and India, the world's main gold market. Tax-free jewellery in the UAE's gold souks and shopping malls draws Gulf Arab and Western tourists.