Dubai's gold industry sales rose 40 per cent in January, boosted by growing tourism and the Dubai shopping festival, the chairman of the Gold and Jewellery Group in the Gulf Arab emirate said.

"Sales in January were up 40 per cent compared with the same period last year," Tawhid Abdullah said. "The sales in the shopping festival were above expectations and we had an impressive tourism season."

"I expect the first quarter sales to rise by 30 per cent," the chairman of the Dubai Gold and Jewellery Group, an industry association, told Reuters in an interview. The Dubai shopping festival began in December and ended on February 2.

Abu Dhabi's gold industry sales fell 35 per cent in January as high prices dampened demand, the Abu Dhabi Gold and Jewellery Group has said adding that Abu Dhabi's gold sales for the first quarter were expected to drop 50 per cent as prices remain relatively higher than last year.

Demand in the UAE fell 9.9 per cent in 2006, but demand in the fourth quarter rose 8.5 per cent on the year, the World Gold Council said in a report.

Import figures Gulf Arab visitors and Westerners have poured into the UAE to shop for discounted, tax-free luxury goods in Dubai's huge shopping malls and the labyrinthine Gold Souk.

Dubai has its own jewellery manufacturers but imports made up 58 per cent of all jewellery sold at retail outlets, while exports account for 47 per cent of total wholesale volume.