Reuters: 9 August 2008 DUBAI - Dubai's second-quarter gold imports fell 2.1 percent to 143 tonnes, compared with a year ago, and exports plummeted 15.8 percent to 64 tonnes, figures from the Dubai Multi Commodities Centre (DMCC) showed on Saturday.
The Gulf Arab emirate's total gold imports for the first half of 2008 were down 4.7 percent, at 265 tonnes. Total exports during the same period rose 26.1 percent to 179 tonnes, according to figures in a DMCC statement.
Gold trade through Dubai reached $6.01 billion in the first quarter of the year, up 26.3 percent from the same period in 2007, while in the first half of the year, trade in the precious metal surged 48 percent to $13.07 billion from the same period a year earlier, the DMCC said.
'Demand for gold has been resilient to global market conditions,' Ian MacDonald, DMCC's executive director for gold and precious metals, said in the statement.
'The sharp rise in prices seen earlier this year has been a prime driver in improving export volumes, and has boosted the role of gold as an inflation-hedging instrument,' he said, in an apparent reference to the six-month performance.
Spot gold XAU powered to a record of $1,030.80 an ounce on March 17 on record-high crude oil, fears of inflation and expectations of more rate cuts in the United States, making the metal more attractive as an alternative investment.
It traded around $855 an ounce in Europe on Friday.
Gold is seen as a safe-haven metal and as a hedge against inflation. The metal is also influenced by oil, currency moves, and generally trades in the opposite direction to the dollar.
Dubai is a long-established market for gold bullion and wholesale and retail jewellery, where the trade is fuelled by strong demand from the Arab world and India, the world's top gold market.
Last year, the Gulf commercial hub's gold imports reached 559 tonnes on investors' appetite for the precious metal, while exports amounted to 287 tonnes.
Tax-free jewellery in the gold souks and shopping malls in the United Arab Emirates -- the seven-member federation that includes Dubai -- draws Gulf Arab and Western tourists.
Drops in sales volume of gold jewellery and bullion imports earlier this year have deepened anxieties among traders that the emirate may lose its lustre as a regional gold hub.
Traders fear high and volatile prices could scare off gold jewellery buyers in Dubai, but analysts say a growing number of Western tourists will drive demand for the yellow metal higher.
'Given the current bullish sentiment of investors and gold's 'safe haven' status, the outlook for gold trade is promising in the remaining months of 2008,' MacDonald said.
