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03/08/2017 - 13:18hs

UAE jewelry trade picks up

Q2 gold jewel sales amounted to 12.2 tons, up 9% from Q2 2016, but down from Q1 2017. Sales are expected to increase further towards the end of the year.

Gavin Hellier/Robert Harding Heritage/AFP

Consumer confidence is running low

São Paulo – Gold jewelry sales were up 9% year-on-year in Q2 in the United Arab Emirates to 12.2 tons sold. In Q2 from Q1, however, sales dropped by 15.8% from 14.5 tons sold from January to March.

The numbers from the World Gold Council (WGC) were made public by Gulf News. The best of the last ten quarters was Q1 2015, with sales reaching 16.3 tons. Saudi Arabia is the region’s number one market for jewelry, with sales reaching 47.7 tons in Q2 this year.

WGC head of member and investor relations John Mulligan says “there is little sign of sustained confidence among consumers, but they did manage to discount the impact of the import duty on jewelry.” Earlier this year, the import duty exemption on jewelry items ended, but most retailers did not include the full added cost on end prices to consumers, according to the WGC.

The WGC believes gold and jewelry product sales will go up Q4, before the Value-Added Tax (VAT) becomes effective in early 2018. “We have seen that happen in other markets where such taxes have come into effect,” said Mulligan.

But the executive believes that the regional scenario is one of the main reasons for the weak consumer market in the UAE. Retailers also mention the gold price hike and weak summer tourist numbers as drivers of the drop in sales. Some products, however, such as gold bars and coins, saw good sales results in Q2.

Worldwide, 953 tons worth of gold in all its forms were sold, down 10% year-on-year according to the WGC. Demand for jewelry slid by 8% to 481 tons, driven by growing demand in India.

*Translated by Gabriel Pomerancblum

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