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DUBAI, THE NEW POWER IN GOLD! |
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2/9/2006 7:43:15 AM |
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Dubai imported 522 tons of gold in 2005, up from 502 tons in 2004, according to a recent statement from the Dubai Metals and Commodities Centre (DMCC).
The article states that "world gold supply averaged 3,997 tonnes in 2005, meaning that one in every eight tonnes of gold supplied in the world comes to Dubai.
"Demand from the Middle East has also witnessed an average annual increase of five to 10 per cent, backed by high regional liquidity and the security of gold as a stable asset in uncertain times,' Colin Griffith, Executive Director-Gold & Precious Metals, DMCC. added.
Dubai is slated to become even more important over the next few years. First, production of gold worldwide is expected to decline 5% or more per year for the next five years. "It's baked in the cake!" Second, recently Saudi Arabia purchased a large amount of precious metals and the physical was stored in Europe. When the Saudis asked for delivery, they were told the commodities were unavailable. Irate, the Saudis sold their stake and began buying locally. Third, central banks and bullion banks have either sold or leased 12,000 to 16,000 tons of gold and it is not coming back at these prices. Fourth, the Middle East values gold as money. And Fifth, less than 1% of Asian reserves are in gold. Are they going to run the risk of the Saudis? Not likely!
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