Islamic Lifestyle

UAE jewelry trade picks up

| 03 August, 2017

Thu Aug 3, 2017 | 1:18pm | SAO PAULO

From the Newsroom*

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