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Gold Flash
27 March 1997
Gold Economics
Record Gold Flows
through Key Supply Hubs in the Middle East and Asia
RECORD GOLD IMPORTS INTO DUBAI IN FEBRUARY OF
56.1 TONNES BUOYED BY STRONG DEMAND ACROSS THE MIDDLE EAST
& INDIA REGION
Following exceptionally strong imports
in late 1996, gold flows into Dubai continued to strengthen
in early 1997.
January saw a record 46.4 tonnes of
gold imports (previous record, November 1996, 35.5 tonnes).
This was then surpassed by imports of 56.1 tonnes in February,
an all-time record for monthly imports through any of the
supply hubs in the Middle East and Asia.
The increase in gold flows via Dubai in early
1997 reflects a combination of factors :-
-
Buoyant demand in India together with the doubling
of the Non-Resident Indian gold import allowance (see
Gold Flash dated 21st January 1997);
-
Strong demand emerging from Pakistan;
-
Good local/ domestic demand in the UAE, boosted by
Ramadan;
-
The opening of a supply route between Dubai and Egypt;
and
the US$ gold price touching a four-year low,
providing the stimulus for additional buying in this price-sensitive
region.
Middle East & India Regional Chief Executive
for the Council, Rolf Schneebeli, commented "This figure
(102.45 tonnes in the first two months of 1997) is even more
astonishing if you chart the growth. Just six years ago, in
1991 Dubai’s imports in the first quarter were 44 tonnes.
This quarterly figure has been surpassed in the first month
alone of 1997! The Middle East & India region is the fastest
growing area in terms of gold demand and Dubai is playing
the role of an effective supply hub for the region."
Imports via Dubai cover about one-third of the
gold flows through the six key distribution hubs across the
Middle and Far East (Dubai, Singapore, Hong Kong, Tokyo, Turkey
and Taiwan). Although imports arrive from a variety of countries
into Dubai, the majority, some 30 tonnes per month currently,
are shipped from Switzerland, with London and South Africa
also being important sources.
WGC Instrumental in Dubai’s Higher
Profile
The Council liaised closely with the trade and
authorities in Dubai to develop and promote Dubai as the prime
gold centre for the region, culminating in the 1996 launch
of the Dubai Shopping Festival. "Dubai - City of Gold"
became the highly successful focal-point of the Festival and
will be continued in 1997. In addition, Council activities
have included establishing 24 carat jewellery ranges as well
as high carat jewellery in modern designs aimed at expanding
both domestic and export demand.
Increased Gold Flows Elsewhere
Dubai is not the only place showing healthy
increases in gold flows in 1997. Imports into Hong Kong in
January reached an 8-year high of 40.2 tonnes. Indications
are that strong demand has continued into February. Singapore
imports in January/February were up 57% to a near record 91.5
tonnes. Indications are that the increased level of imports
into both Hong Kong and Singapore are in part reflecting an
upturn in gold going into China. Imports into Turkey totalled
20 tonnes in the first 2 months of 1997, more than treble
the level of a year ago.
This means that flows into the main supply hubs
of the Middle East and Asia are at present running at a monthly
level of some 150-160 tonnes vs. 85-95 tonnes over the last
24 months.
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