Jewellery sales face trouble, as gold prices soar

Dubai, May 8: Dubai's jewellery sector, which is mostly run and patronised by Indian expatriates and visitors, is facing the prospects of consumer resistance as gold prices have crossed the 700-dollar-per ounce price threshold.

Dubai's jewellery sales, which last year hit 108 tonnes, could now struggle to achieve the same level this year because of price volatility in the precious metal.

UAE gold demand fell about 10 per cent in volume terms in 2006, according to the World Gold Council (WGC), Gulf News reported.

''Unstable prices could make consumers delay purchases and discourage traders from replenishing stocks,'' said Dubai Gold and Jewellery Group (DGJG) Vice-Chairman Chandu Siroya.

The market has so far absorbed high prices but if it goes beyond 700 dollars, then there will be consumer resistance, Mr Siroya added.

UNI