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Business · General News · UAE

UAE Sees 10% Drop in Gold Jewellery Demand Amid Soaring Prices

By · April 30, 2024 · Updated May 3, 2024 · 1 min read
UAE Sees 10% Drop in Gold Jewellery Demand

The first quarter of 2024 witnessed a significant decline in UAE gold jewellery demand, with a 10% year-on-year drop. This represents the lowest demand in the past nine months, according to data released by the World Gold Council (WGC).

The primary culprit behind this slumping demand is the record-breaking surge in gold prices. Geopolitical tensions around the world, coupled with anticipation of interest rate hikes by the US Federal Reserve, are cited as contributing factors to the price increase.

Demand Figures by Segment

  • Jewellery demand: 10% year-on-year decline to 8.8 tonnes in Q1 2024 (quarter-on-quarter decline of 1.5 tonnes)
  • Bars and coins demand: 10% year-on-year decline to 2.0 tonnes in Q1 2024

The Middle East region also experienced a decrease in jewellery demand, albeit at a milder 4% year-on-year (42 tonnes in Q1). This decline is attributed to the contrasting situations in the UAE and Saudi Arabia (10% and 12% year-on-year drops, respectively) versus Egypt, where a strengthened local currency led to a decrease in gold prices and a subsequent rise in demand.

Globally, gold demand witnessed a 5% year-on-year decrease to 1,102 tonnes in Q1 2024. This decline is attributed to ETF outflows, which were offset by continued central bank gold buying (290 tonnes added to official holdings). Notably, the technology sector saw a 10% increase in gold demand due to the booming AI industry.