Gold Investment demand 'very buoyant' in Middle East

The head of a Dubai-based independent financial firm has claimed today (August 17th) that Gold Investment demand in the emirate is remaining strong, Reuters reports.

According to data from the Dubai Multi Commodity Center, imports of Gold Bullion into Dubai increased by 13 percent on a year-on-year basis to 300 tonnes in the first half of 2009.

Jeffrey Rhodes, chief executive of INTL Commodities DMCC, noted that the yellow metal is growing in popularity both in Dubai and on a wider scale in the Middle East.

He told the news provider: "I think it's fair to say that the investment demand level for gold for the Middle East on the whole has been very buoyant. Physical gold is still king in the Middle East."

Meanwhile, the European Central Bank announced recently that a third Central Bank Gold Sales Agreement has been signed and will replace the existing deal in September.

As part of the arrangement, sales of gold will be limited to 400 tonnes per year, representing a decline of 25 percent from current regulations.

Eugen Weinberg, an analyst at Commerzbank, the second-largest bank in Germany, explained that the move will reduce the risk associated with gold and could push prices higher.

"Central banks are not such a danger for the gold price as they used to be in the 1990s," he said in an interview with Reuters.

"It was expected that there would be a renewal, but the renewal itself took some insecurity out of the market - it wasn't expected that they would reduce the selling volume by 100 tonnes a year."

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