DUBAI: The volume of gold jewellery sales in Abu Dhabi fell about 40 per cent last month from November as higher prices and the uncertain global financial outlook crimped buying, the emirate's industry group said yesterday.
Sales could pick up this month if prices retreat enough to make the precious metal more attractive to buyers looking for an alternative to investing in equities, said Abu Dhabi Gold and Jewellery Group chairman Tushar Patni.
Prices last month averaged about 99 dirhams ($26.95) a gram, up around 11pc from November, Patni said.
"If prices fall below 90 dirhams, then we could see buying activity pick up, but at the moment prices are still too high," he said.
"Gold is a luxury item. People are less inclined to spend on such items when the economy is not doing well."
Re-selling of gold jewellery is beginning to rise, Patni said.
"People view current prices as an appropriate time to cash in," he added.
Spot gold ended last month at around $878 an ounce on Friday, up over $60 from the end of November.
Prices for the bullion remain well supported compared to other commodities as investors continue to seek the metal as a haven from risk as global financial turmoil hammers other asset classes.
