Commodities Buzz: Gold Demand In Saudi Arabia And UAE Set To Moderate On New Taxes
The new value-added tax (VAT) set to be introduced in Saudi Arabia and the United Arab Emirates in 2018 will negatively impact gold demand, according to the World Gold Council (WGC). Demand is likely to falter once the new tax is in place, the WGC said in a latest update. The VAT will amount to 5% and will be imposed starting in January on all non-essential luxury goods, including gold jewelry. The WGC also noted that the gold market might see a significant boost in demand at the end of this year, as consumers rush to buy gold jewelry before the tax is introduced. In Q3, gold jewelry demand in Saudi Arabia was weak, falling 9% to 9.8 tonnes, largely dragged down by higher prices, the WGC said in its latest Gold Demand Trends report. The U.A.E. also saw a decline of10% to 7 tonnes, the report added. Overall demand in the Middle East slipped 4% to 40.9 tonnes â the lowest level in three years.