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The UAE accounts for about 14 per cent of the world’s gold trade.

The UAE accounts for about 14 per cent of the world’s gold trade.

The gold, diamond and precious metals sector is one of the most important sectors for the UAE’s economic diversification, and is expected to witness significant growth in the coming period as part of the country’s diversification objectives, Juma Mohamed Al Kait, assistant undersecretary, UAE Ministry of Economy, said on Thursday.

The UAE accounts for about 14 per cent of the world’s gold trade, and Dubai, in particular, is rising through the ranks as a purchase and investment destination, as it accounts for 20 per cent of world sales of precious metals, Al Kait said at the eighth edition of the Dubai Precious Metals Conference (DPMC).

Global gold demand in 2018 reached 4,345.1 tonnes, up from 4,159.9 tonnes in 2017 and is in line with the five-year average of 4,347.5 tonnes. A multi-decade high in central bank buying (651.5 tonnes) drove growth. Full year jewellery demand was steady at 2,200 tonnes, a dip of one tonne from 2017 levels, according to the World Gold Council’s Gold Demand Trends.

“The strategic location on the trade routes of the East and West makes the UAE an important gateway that connects the producing countries, the major manufacturing centres, and the largest consuming markets in the world. DMCC plays a very crucial role as a leading hub for commodities and for putting the UAE on the world map as the leader in precious metal trading,” said Al Kait.

He added that the DMCC’s commitment to creating a diverse and robust trading environment aligns with the UAE’s mission to be a diversified economy and promote economic growth and development. DMCC, the world’s leading free zone for commodities trade and enterprise, held the conference under the theme ‘Unlocking Growth in Global Precious Metals’ with the endorsement of the UAE Ministry of Economy. The conference welcomed around 300 industry experts to discuss many of the key factors and opportunities shaping the precious metals market.

Gautam Sashittal, CEO of DMCC, said that global economic growth is slowing, trade conflicts persist, and recent geopolitical events have generated widespread uncertainty in markets. “As an industry, we must rise to the challenge through being innovative, and by exhibiting a willingness to change, adapt and evolve. This is why DPMC is so important – its themes are synced with the priorities of the industry. Ultimately, DPMC is the platform to discover how, collectively, we can move forward, advance the industry and grow the precious metals sector as a whole,” said Sashittal.

Alexander Pschenichnikov, deputy head of Department of State Regulation, Ministry of Finance, Russian Federation, said that despite rapidly changing world economics, gold has always been an instrument of savings and trade-monetary relations. “The new rules of Basel Committee on Banking Supervision (Basel III) that came into force on March 29, 2019 confirm the relevant axiom. Although new payment instruments and corresponding currencies are appearing, we see how unstable cryptocurrencies and other new currencies are. Therefore, gold will always be a solid long-term investment and keep its stable position,” said Pschenichnikov.