DUBAI, July 28: Saudi Arabia gold sales rose almost 17 per cent in volume and 25 per cent in value in the second quarter of 2007, a senior World Gold Council official said on Saturday.

“The euphoria of selling gold to invest in stocks cooled off and the region saw a very healthy revival this year,” said Moaz Barakat, managing director of the WGC in the Middle East, Turkey and Pakistan.

“In the first half of the year, the gold market in Saudi Arabia saw an increase of 18 per cent in volume and 30 per cent in value according to our primary estimates,” he told Reuters in an interview.

Four of the seven Gulf Arab stock benchmarks dropped more than 35 per cent in 2006, resulting in a capitalisation loss of about $500 billion since February, and analysts say much capital has left the bourses for other asset classes.

Second-quarter gold demand in the United Arab Emirates increased by almost 14 per cent, while sales value rose 25 per cent. Total tonnage demand in the first half of 2007 was up by almost 24 per cent, while sales value saw an increase of 27 per cent during the same period, Barakat said.

Demand in the UAE, a seven-member federation that includes Dubai and Abu Dhabi, fell 9.9 per cent in volume terms in 2006, the WGC has said.

Local traders have said gold sales in the UAE could fall by about 10 per cent in volume for the second consecutive year in 2007 due to price volatility.

In Egypt, the most populous Arab country, both second-quarter and half-year gold sales were up 15 per cent in volume, and 30 per cent in value as regional players continue to revive the market, Barakat added.

Saudi Arabia’s gold demand fell 16.4 per cent to 128.1 tons in 2006 due to price volatility in the first half of the year, but demand rose 14.7 per cent in the fourth quarter of 2006 from the same period in 2005, the WGC said in a report in February.

—Reuters