The demand for gold jewellery in the UAE declined for the second consecutive quarter in 2024 due to high global precious metal prices. According to data from the World Gold Council, yellow metal jewellery demand dropped from 10.3 tonnes in the fourth quarter of 2023 to 9.6 tonnes in the first quarter of 2024 and 9.2 tonnes in the second quarter. The demand saw a 13% year-on-year decrease to 9.2 tonnes during the April-June 2024 period, compared to 10.6 tonnes during the same quarter last year.
Gold prices have been on the rise, reaching their highest level recently, with the 24K variant crossing Dh300 per gram. On Monday, various karats were trading at different rates, with 24K at Dh289.5, 22K at Dh268.0, 21K at Dh259.5, and 18K at Dh222.5 per gram. Spot gold was trading at $2,384.09 an ounce on Tuesday morning, surpassing $2,400 an ounce recently.
Andrew Naylor, head of Middle East and public policy at the World Gold Council, attributed the drop in UAE jewellery demand to high gold prices globally, which are mirrored in the local market. He mentioned the impact of unexpected floods in April and the reliance on the tourist trade as significant factors affecting demand in the UAE. The UAE is more internationally exposed when it comes to jewellery demand, making it sensitive to fluctuations in global prices.
The decline in gold jewellery demand in the UAE aligns with global trends, with yellow metal jewellery demand falling by 19% year-on-year to 390.6 tonnes. Overall consumer demand in the UAE also decreased by 11% year-on-year to 11.8 tonnes during the second quarter. Additionally, gold bars and coins demand in the UAE saw a 5% year-on-year decrease to 2.6 tonnes last quarter, further impacted by high prices.
Louise Street, senior markets analyst at the World Gold Council, highlighted the record-breaking gold prices in the market, driven by strong demand from central banks and the OTC market. The OTC market saw a significant increase in transactions, indicating continued interest in gold from institutional and high-net-worth investors for portfolio diversification. However, the surge in prices led to a decline in jewellery demand as retail investors opted to take profits.
The World Gold Council’s Q2 2024 report indicated a 4% year-on-year increase in total global gold demand to 1,258 tonnes, marking the strongest Q2 ever. This growth was supported by healthy OTC transactions, which increased by 53% year-on-year to 329 tonnes. Despite the challenges faced by the jewellery sector in the UAE, the global gold market continues to show resilience and strong demand, driven by various investment channels. Stay updated on gold market trends to make informed decisions in this dynamic market environment.
