Thursday, 26th January 2006 (5324 views)

The United Arab Emirates gold market is tipped to grow this year.

Industry analysts expect the gold market, along with the jewellery sector, to enjoy sales growth of 25 per cent, the Gulf News reports.

This is despite the ever-rising price of gold both within the UAE and globally. The local price of gold has now hit Dh 60 per gram and is expected to reach Dh80 per gram. Worldwide it stands at $600 per gram, predicted to hit $650 by June.

Despite this, however, industry experts expect local and regional demand to remain high, as buyers try to avoid future price surges and the pitfalls of other investment opportunities.

"Buy gold and jewellery now. This is not a campaign punchline. It is real advice to the investors and consumers," said Firoz G. Merchant, chairman of Pure Gold.

Mr Merchant explained that many investment funds are actively increasing the proportion of gold in their portfolios, spurred on by a turbulent Middle Eastern economy, high oil prices and the weaknesses of some currencies.

He said that many portfolios contain between five and ten per cent gold, with the possibility for more.

Mr Merchant added that confidence in the stock market was also falling, particularly in the light of the collapse of the Tokyo market last week. He summed up the attraction of gold, saying "if you buy gold you will not lose anything at the end of the day".

In a reflection of the growing prominence of gold, the Dubai Gold and Commodities Exchange yesterday (January 25th) announced that it will begin trading seven days a week.

 

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