Gold Bars, Coins Lure Investors in Middle East

The latest World Gold Council (WGC) report testifies that more people across the Middle East are buying gold bars and coins.

In the third quarter, retail investors in the U.A.E. bought 1.6 tons of gold bars and coins, up 23% from the same period last year. That amount represented a 57% increase in value to $63m compared with the third quarter of last year," said the WGC report on gold investment trends in the Middle East.

The report says that shopping crowd in the UAE alone bought US$741 million worth of gold (including gold coins, bars and jewelry items) in the third quarter, 20% more than in the same period last year.

While the amount of gold that physically changed hands in the three-month period was down by 6% to 18.8 tons, U.A.E. consumers spent $121m more than in the third quarter last year, the latest data from the council show.

According to Yogaani Bhatia, the U.A.E. country manager for WGC, even though high prices deterred some potential buyers during Ramadan, gold buying season is back across the Emirates these days. She said Asian expatriates are buying gold from shopping malls in Dubai before they head to their home countries for holidays and marriage occasions.

WGC says since global precious metals outlook is bullish, many people are buying gold bars and coins sensing that the gold price would rise to higher levels in the coming months.

"You have a lot more consumers buying slightly fewer grams, but a lot more people are encouraged to buy gold," Ms Bhatia said. "The quantity is slightly reduced, but they do not stay away."