Gold jewellery sales in Dubai down sharply

Dubai, July 9, 2009 (WAM) - Gold jewellery sales in Dubai are down around 30 per cent in June on a year ago, as high prices of the metal and the global economic downturn deter tourists from visiting the emirate, five jewellery retailers told Reuters.
Almost eight million tourists visited the emirate, branded as the City of Gold, last year, many of them lured by the tax-free jewellery. But retailers Reuters spoke to say they have seen far fewer tourists this year.
"In June sales were down about 30 per cent from last year. Because of the hot weather and economic conditions fewer tourists are here to shop," said Sanjay Jity, a shopkeeper from Al Khaledyah Jewellery in the old souq, or market.
Hotel revenues in Dubai fell 40 per cent this May and June compared with the same months last year, according to hospitality agency STR Global.
The Dubai Department of Tourism and Commerce Marketing said 7.7 million tourists came to Dubai in the year to December, but had no updated figures for this year.
The higher price of gold has also deterred buyers, another salesman at the souq said. The retail price of 22 carat gold was around Dh101 per gramme, 20 per cent higher than last year, he said. "Many people now can't afford these prices," the salesman said.
Demand for gold in the Middle East fell 26 per cent year-on-year during the first quarter, bucking a global trend that saw demand increase as investors bought gold as a safe haven from the economic maelstrom, the World Gold Council said in its quarterly report in May.