It is reported that gold demand has fallen dramatically in the UAE and jeweller closures are “inevit-able” the World Gold Council said in a report.

The UAE saw demand fall by 39 per cent in the third quarter of this year compared to the third quarter of last year, the council said.

“A combination of high gold prices, declining tourist numbers and a sharp downturn in the property sector were responsible for the drop off in demand,” according to the report, released yesterday.

In the Middle East as a whole, jewellery demand fell by 34 per cent, while investment demand dropped by 11 per cent.

However, in the UAE, jewellery demand was down 38 per cent and investment dem-and 52 per cent, compared to the third quarter of 2008.

However, the third quarter of 2008 was an exceptionally strong quarter.

When compared to a five year average of third quarters, total demand in the UAE was down six per cent, the report said.

Despite this, the council said that jewellers in the UAE were at risk of closure.

“The jewellery trade, most particularly in Dubai, is under pressure. As with many residents in the UAE, many jewellers had invested their profits in the property sector.

“Left with cashflow problems jewellery retailers have been forced to liquidate inventories to meet margin calls and make repayments on gold loans. As yet, there have not been any notable closures of jewellers, but this is probably inevitable if demand conditions do not improve,” the council’s report said.