Industry sales are probably 8 percent higher so far this year compared with the same period in 2014, Abdullah said in an interview at a commodities conference in Dubai on Sunday. In January, when gold jumped to a five-month high, demand was probably 2 to 3 percent higher over a year earlier, he said.

January is when gold jewelers in Dubai anticipate higher demand from the monthlong Shopping Festival. The industry was looking for sales to jump 10 percent, Abdullah said. Demand has been rebounding as prices fell from the January high, he said.

"In the last few days, we have been catching up,” Abdullah said. Gold-jewelry sales in Dubai so far this year are estimated at 15 billion dirhams ($4.08 billion), or about 10 metric tons, Abdullah said. In 2013, United Arab Emirates jewelry gold demand rose 26 percent to 62.7 tons, according to Thomson Reuters GFMS data. Prices dropped 28 percent that year.

Gold has climbed 4.5 percent this year to $1,237.10 an ounce, trimming gains of as much as 10 percent by mid-January. Buyers of the metal are still waiting for prices to fall more, said Frederic Panizzutti, chief executive officer of MKS Precious Metals DMCC in Dubai.

"There is no physical demand,” said Panizzutti, who is also global head of sales and business development for MKS Pamp Group. In a sign of slow demand, gold in Dubai is trading at a discount of $1.20 an ounce, he said. "It’s a good discount,” he said.

Gold will probably trade between $1,100 to $1,300 an ounce this year, Abdullah said.

 

(Bloomberg)