Sales for Abu Dhabi's gold industry jumped 7 per cent in November, although they fell 15 per cent in the third quarter, the chairman of the Gold and Jewellery Group in the capital said on Sunday.

Customers had returned to Abu Dhabi gold market after the end of Israel's 34-day war with Hezbollah guerrilla group, which had affected gold sales. "The market is now stable compared to what happened in the third quarter and that is why we have seen some increase," Tushar Patni, chairman of the Abu Dhabi Gold and Jewellery Group, an industry association, said.

But Patni expected Abu Dhabi's gold sales for the fourth quarter to drop by 20 per cent as prices remain relatively higher than last year.

Visitors from Gulf Arab states such as Saudi Arabia flock to the UAE's gold souqs and malls to buy brands like Tiffany, Cartier and Chopard and Italian designer jewellery such as Pasquale Bruni and Roberto Coin.

In Dubai, gold sales rose 7.4 per cent in November compared with the same period last year, but third quarter sales fell 30 per cent on higher prices. Both Abu Dhabi and Dubai have their own jewellery manufacturers, but imports make up almost 60 per cent of all jewellery sold at retail outlets.

The World Gold Council (WGC) has said the UAE's gold jewellery demand was down by less than 1 per cent in the third quarter, while net retail investment was up by 5 per cent. The council said the retail gold sales increased by 41 per cent during the same period.

Gold traders in Abu Dhabi, which has about 100 retailers in the Hamdan Street area and at the Madinat Zayed Centre, say spending on gold jewellery or gold bars will be high only until the end of the feast of Eid Al Adha, and after that sales are likely to drop.

"We could see a rise during Christmas week and Eid Al Adha, but we won't sell as much as we want and we will not be able to compete with Dubai and the shopping festival it has at the moment," a local trader said. Dubai's shopping festival, which ends on February 2, is expected to boost Dubai's gold sales by almost 50 per cent, according to industry association Dubai Gold and Jewellery. "Prices are not in our favour either and they are still high for buyers," the trader added.