A report conducted by the recent World Gold Council, the demand for gold dropped in the UAE by 26% during the second quarter of this year, compared to the same period last year, comes this fall to coincide with the rise in gold prices in the region compared to the significant decline in oil prices .
The Council’s report says that the decline in demand in the country is estimated at 11.1 tons during the last three months to the borders of June 30, up from an estimated 49 tons during the same period last year, on the other hand, observers say that this decline was not surprised by, especially after the rise in the prices oil and continuing geopolitical unrest in the Middle East.
For the Middle East region as a whole has the overall demand which fell to 22% on an annual basis for up to 45 tons, in contrast, the price of gold has risen by 27% this year as a result of volatile economic growth and low interest rates, linked to gold prices usually tend to fall when interest rates increase , along with the impact of the dollar’s strength in the value of goods associated with it where it becomes more expensive for buyers when it is converted into other currencies.
This rise comes at the price of gold, after the events witnessed by the metal continued to decline for three consecutive years, as we have seen the rise of the dollar against other currencies, an increase in interest rates in the United States for the first time and ten years ago. Egypt has seen the state the largest drop in the region, the demand side registered fell by 40% to 5.3 tonnes, due to the depreciation of the local currency against the dollar, as gold has become expensive for consumers and beyond their purchasing power.
Turkey has also suffered from weak demand during the second quarter as a result of the political twists and lower tourism revenues and rising unemployment and falling exports from Russia, in contrast, Iran recorded an increase in demand of 10% on an annual basis thanks to the optimism that came as a result of the lifting of international sanctions in January.