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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Richnorth who wrote (11586)	5/13/1998 5:28:00 PM
From: Alex	Read Replies (1) \| Respond to of 116759

INTERVIEW-Saudi gold demand glistens, WGC says By Hilary Gush DUBAI, May 13 (Reuters) - Gold demand in Saudi Arabia, where per capita consumption is already among the world's highest, is expected to reach up to 210 tonnes this year, the World Gold Council (WGC) said on Wednesday. Saudi Arabia increased consumption of the metal by eight percent last year to 199 tonnes. That put the country of 18 million people among the world's top five gold consumers, the producer group estimates. The high ranking is significant given an Islamic ban on men wearing gold. WGC Middle East and India manager Moaz Barakat told Reuters his forecast of 200-210 tonnes consumption this year was made despite initial signs of a slowdown in demand from visiting Southeast Asian pilgrims during this year's haj season. ''This year we found a drop in Malaysian and Indonesian pilgrimage demand because of the economic crisis in these countries,'' he said. This year, haj began in early March. ''The first quarter was quite encouraging with initial estimates showing demand at about 70 tonnes, thanks to the Eid holiday and the beginning of haj,'' Barakat said. Lower world gold prices so far this year could bolster buying in Saudi, which in 1997 ranked below India, the United States, China and Turkey in gold consumption. Only the United Arab Emirates was higher up the per capita consumption table last year, with 2.4 million people buying 71.6 tonnes. Saudi demand could also get a boost from developing niche markets in the oil-rich kingdom, where interest is high from women who see gold as a safety net in case of divorce, he said. ''Saudi Arabia is more or less a stable, saturated market. How much more can people buy?'' Barakat said. But some pockets of the market were not thoroughly tapped, he said, listing children's jewellery, in a country where half the population is under 16, as well as religious-design pieces, 24 carat items and so-called bullion jewellery. The population is also growing fast -- at some 3.5 percent. Over two million Moslems, half from abroad, converge on Mecca each year for haj, where pilgrims pick up pendants of the Kaaba, Grand Mosque or Koran as mementoes of their trip. Haj is a once-in-a-lifetime experience for many and a pillar of Islam. Barakat said pilgrims, many from poor countries, generally bought low-value pieces of jewellery, but in large volumes. On the other hand, there was a growing trend among Saudis to buy fewer, but higher-value pieces. He said recycling, common throughout the region, was in decline in Saudi Arabia. WGC estimates recycling dropped to 52 tonnes last year from 92 tonnes in 1996. ''We are trying to achieve a more sentimental attachment to jewellery to fight recycling,'' Barakat said, adding that a lower gold price meant less reason to recycle. He said Saudi-made jewellery accounted for about 80 percent of that sold in the kingdom. Numerous factories, some employing over 300 people, made mostly 21 carat pieces. According to the WGC, official Saudi gold imports in 1997 were 114 tonnes, more than double those in 1996 as the authorities tightened the screws on smugglers trying to avoid a 12 percent import duty on jewellery.