Gold Demand: New Taxes in Middle East Hit Gold | The Mesh Report

Gold Demand: New Taxes in Middle East Hit Gold

Mike Hammer November 10, 2017 Comments Off on Gold Demand: New Taxes in Middle East Hit Gold
Today we continue looking around the world at factors affecting consumer gold demand.  So far it’s down in India and up in China, netting a drop in demand for 2017. Now, Saudi Arabia and the UAE announced a new 5% tax on gold effective Jan. 2018.

This sure won’t help demand any, though we’re pretty sure the reason the tax is set at 5% is because Saudi Arabia and the UAE want to cash in on all the gold jewelry sold through Middle Eastern markets.  After all, the UAE projects collections of $3.3 Billion from the new tax in the first year. That’s a chunk of change for sure!  They probably figure 5% is small enough that it won’t affect buyers much.  And they’re probably right for domestic sales.

However, the new tax might reduce sales to customers from other countries; after all, a lot of small gold bars and gold jewelry flows through the Middle East from other countries. We’ll have to wait and see if the new tax slows down that demand.  Today’s featured article gives some more details and figures about the new tax.
Related: Demand is Down in India, but it’s Been Rising in This Country

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