Sifting through the World Gold Council’s Gold Demand Trends report we told you about yesterday is revealing some interesting tidbits. For example, gold demand was down last year in the Middle East overall, but up in Iran and Kuwait. Demand in Iran was up 12 percent to 45.4 tonnes, the highest since 2013.
In fact, demand in Iran was almost as high as it was in much richer Saudi Arabia, which bought 45.7 tonnes. However, demand in the UAE was down for the fourth year in a row, and hit a 20-year low.
The overall drop in demand seems strange. After all, just two years ago, everyone was sure that the new interpretation of Shariah law meant the Middle East would have investors buying gold hand over fist. Apparently that’s not happening, or they’re buying paper gold such as ETFs.
One factor that could well be responsible: low oil prices through much of 2017 doubtless reduced Middle East cash flows, which would mean less pocket money to spend. You can read more about Middle Eastern gold demand in today’s featured article.