The World Gold Council Regional Office in Dubai released its quarterly Gold Demand Trends report which reflects record figures for the third quarter of the year. The report showed that gold demand in Saudi Arabia increased by 51% in value terms and by 18% in tonnage terms in Q3, 2008 compared to the same period of last year. Total demand in KSA in Q3 reached around 41 tons at a value of $1.5 billion. In UAE, the increase reached 22% in tonnage terms; equal to 56% increase in value terms. Gold sales in increased too in other GCC Countries and other Arab states; in Egypt it reached 33% increase and other Gulf States 42% increase – both in value terms. Internationally, the dollar demand for gold reached an all time quarterly record of US$ 32 billion in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and gold jewelry buyers returned to the market in droves on a lower gold price. This figure was 45% higher than the previous record in Q2 2008. Tonnage demand was also 18% higher than a year earlier. The gold consumption figures for the world show retail investment demand (retrial sales of gold coins and bars) rising by 121% to 232 tons in Q3, with strong gold bar and coin buying reported in Swiss, German and US markets. The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a haven. Overall, Q3 saw Europe reach an all time record 51 tons of bar and coin buying and France became a net investor in gold for the first time since the early 1980s. Q3 saw a record performance as consumer demand increased for gold jewelry with buyers returning to the markets on lower price points, around and below $800, demonstrating the underlying positive sentiment towards gold and its recognition as a store value. Gold's universal role as a store of value has shone through during this quarter helping attract investors and consumers to all forms of gold ownership. The rise in demand for gold bars and coins has been impressive. Perhaps most encouraging is the return to positive gold jewelry buying which has been absent for several quarters due to the high levels of price volatility. Gold jewelry demand in the Middle East, which accounts for more than 90% of total consumer offtake in the region, rebounded in Q3 after a softer Q2 that was negatively affected by both the high gold price and price volatility. The Saudi Arabia and UAE were the main drivers of jewelry demand in Q3 in the region with both countries recording growth rates of more than 50% in dollar terms. Bisher Diab, the World Gold Council's Consultant and County Manager (Saudi Arabia) commented on the report saying: “The local buying & gifting seasons in the Saudi market; supported by heavy marketing and promotional campaigns as well as the initial impact of the world financial crisis in Q3, whether in the gold jewellery sector or the retail investment sector (retail gold coins and bars) –all have had positive impact on gold demand.
