Vimala Vasan

Abu Dhabi, Feb. 7

DUBAI imported 522 tonnes of gold in 2005, up from 502 tonnes in 2004, the Dubai Metals and Commodities Centre (DMCC) said on Tuesday. According to a recent report by GFMS, an independent, London-based consultancy and research company focussed on international gold and silver markets, world gold supply averaged 3,997 tonnes in 2005, meaning that one in every eight tonnes of gold supplied in the world comes to Dubai, a statement from the DMCC said.

Dubai's top eight trading partners for gold remain India, Switzerland, the UK, Malaysia, Saudi Arabia, the US, Singapore and South Africa.

Local gold sales in Dubai have also increased to 115 tonnes in 2005, covering both imports and exports for gold bars, scrap and jewellery.

The increase in imports of gold to Dubai took place despite the overall increase in gold prices, which reached 25-year highs in 2005.

"Dubai is known as the City of Gold, and these statistics support that," said Mr Colin Griffith, Executive Director-Gold & Precious Metals, DMCC. "The rising price has been driven by investors who look at gold as a secure asset class, rather than by end users, despite a steady growth in consumer demand from China and India," he added.

"Demand from West Asia has also witnessed an average annual increase of five to 10 per cent, backed by high regional liquidity and the security of gold as a stable asset in uncertain times," he added.

"The establishment of the DMCC has gone a long way towards streamlining and making the local markets more transparent and thereby growing the volume of gold trade through Dubai. We estimate that the current volume of 522 tonnes will continue to increase in 2006. A significant percentage of this growing volume is also expected to be undertaken by companies under the umbrella of DMCC," Mr Griffith said.

(This article was published in the Business Line print edition dated February 8, 2006)
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