Gold jewellery demand in the UAE slumped 86 per cent in the second quarter to just 1.3 tonnes compared to 9.3 tonnes in the same period last year due to a lockdown in the wake of the coronavirus pandemic, according to the World Gold Council (WGC).
Data from the council showed that the UAE's first-half gold jewellery sales nearly halved (46 per cent) to 10.8 tonnes against 20 tonnes for the same period last year.
The sale of bars and coins declined at a slower pace of 40 per cent year-on-year in the second quarter as they were bought by investors as a safe investment due to uncertain times.
Only 0.8 tonnes of bars and coins were sold in the quarter to 1.3 tonnes during the same period last year. First-half sales of bars and coins fell to 2.6 tonnes compared to 2.9 tonnes during the first half of 2019.
The UAE enforced movement restrictions during the March-to-June period.
Last week, gold settled at a new all-time record high of $1,994. Goldman Sachs raised its 12-month gold price forecast to $2,300 per ounce on expectations of further downside in US interest rates and a favourable environment for the safe-haven metal.
Tawhid Abdullah, chairman of the Dubai Gold and Jewellery Group, has also predicted that gold will touch $2,500 in the coming few years.
The rising geopolitical tension between the US and china, the world's two largest economies, is also driving investors towards safe-haven assets.
WGC data also showed that second-quarter consumer demand slumped 80 per cent to 2.1 tonnes from 10.6 tonnes during the period. First-half consumer demand dived to 13.4 tonnes against 22.9 tonnes, a drop of over 41 per cent.
With second-quarter gold demand down 11 per cent year-on-year globally to 1,015.7 tonnes, demand for the first half of the year was six per cent weaker at 2,076 tonnes. Total bar and coin investment worldwide weakened sharply in the second quarter, leading to a 17 per cent year-on-year decline in first-half demand to 396.7 tonnes.
First-half jewellery demand worldwide slumped 46 per cent year-on-year to 572 tonnes as markets remained in lockdown and consumers were deterred by the high price and a squeeze on disposable income.
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