Despite the volatile global financial climate, the gold and jewellery business in the UAE will continue to sustain its growth due to high consumer demand and spending power, officials in Dubai said on Saturday.
“Despite significant price increases, high demand and rising regional spending power will continue to sustain the strong and consistent performance of the gold and jewellery trade,” Sultan Bin Saeed Al Mansouri, Minister of Economy, told delegates at 6th Dubai City of Gold Conference on Saturday. “In fact, Dubai reported an almost 30% increase in its gold trade despite the global economic crunch. What is important is to maintain the momentum of positive change currently sweeping the industry and back this up with strategic initiatives which will help the trade maintain its share in the global market.” Mansouri said the vibrancy of the gold and jewellery sectors reflects the aggressive regional economic diversification efforts of the government which seeks to reduce dependence on oil.
In 2007, the contribution of the non-oil sector to Dubai’s GDP was 65%, with 10% derived from gold and jewellery revenues. The government targets a GDP growth rate of 11% towards 2015 and seeks to focus on economic diversification to achieve Dubai’s strategic plan. “The gold and jewellery trade will be a major driver of diversification, as re-exports form the backbone of the region’s non-oil trade and gold is the UAE’s major re-export.” Said Al Mansouri. In 2007, Dubai imported 559 tons of gold, up 14% from 489 tons in 2006. The city also re-exported 287 tons, surpassing the 2006 figure of 274 tons. Al Mansouri said Dubai is also evolving as a major center for diamond trade, which hit $11.23 billion last year, posting a 53% increase over 2006. He added that it was the trade of diamonds and diamond jewellery that compensated for the decline in gold sales volume following a surge in gold prices.
Ian MacDonald, executive director for gold and precious metals of the DubaiMulti Commodities Center, said the high prices are not impacting the volume of gold trade in Dubai which hit a staggering value of $19 billion last year. Gold sales in Dubai, which boasts of the highest concentration of jewellery shops in the world, also went up by 16% in 2007 despite higher gold prices. “I’m pretty sure that in 2008, we’re going to see an increase in volume in Dubai,” MacDonald said at the conference. The conference, which drew about 500 delegates from the region and other countries, seeks to raise the profile of the UAE’s jewellery industry globally by providing a platform for industry members to exchange ideas and share experiences. “This year, the two-day event is set against a backdrop of global challenges in terms of a fluctuating worldwide economy and rising price of gold. But as they say, ‘when the going gets tough, the tough gets going,’ so here we are today, together as an industry to debate and challenge ourselves to bring out the best in us and work together,” said Tawfiq Abdullah, chairman of the Dubai Gold and Jewellery Group.
Over 500 delegates from the world’s leading retail, trading and manufacturing centers of gold and jewellery, as well as global financial houses, are attending the two-day conference, which will discuss industry trends and developments against the backdrop of volatile gold prices and the ongoing stock market uncertainty. (Gulfnews)