Gold jewelry demand falls to 20-year low in UAE

Gold jewelry demand in the United Arab Emirates (UAE) fell to a 20-year low in 2017, marking the fourth consecutive annual decline, according to a recent report from the World Gold Council.

Demand was down 2 percent to 42.8 tons last year, the report said. The decline came despite a 16 percent year-on-year (YoY) gain in demand in Q4 2017 as consumers rushed to make purchases ahead of the 5 percent value-added tax that was levied in January.

Saudi Arabia, the biggest buyer in the Middle East region, bought 45.7 tons of gold jewelry last year, lower by 8 percent YoY, the report showed.

In the Middle Eastern region demand recovered in the fourth quarter, but losses from the first six months of 2017 dominated, the report said. The annual demand was down 1 percent YoY.

Kuwait saw a rise in demand, and Iran was the strongest performer.

“In Egypt, demand was dented again by the weak local currency, which kept prices elevated,” the Council said. “But in value terms, demand increased in 2017 (by 56 percent), suggesting that consumers consider a certain value of spend rather than focusing on the weight of gold they purchase.”