Gold is being offered at significant discounts in Dubai as flights have been disrupted due to the war in the Middle East, making it difficult to export the precious metal from the UAE. This was reported by Bloomberg, citing sources.
Many buyers are refusing new orders due to the lack of guarantees of fast delivery and high transportation and insurance costs, while traders are reluctant to store the metal and are offering discounts of up to $30 per ounce compared to the global benchmark in London.
The UAE, and Dubai in particular, is an important center for gold processing and export to Asia, as well as a supply channel from Switzerland, the United Kingdom and a number of African countries. In 2024, the country imported 1,392 tons of gold worth more than $100 billion.
Gold is usually transported in the cargo holds of passenger aircraft, but the UAE’s airspace is currently partially closed due to missile attacks from Iran. Land transportation to airports in neighboring Saudi Arabia and Oman is also associated with risks and difficulties, especially when crossing borders.
Due to delays, several cargo shipments have been blocked, leading to a short-term shortage of physical gold in India, the main consumer of Dubai’s metal. At the same time, the country’s reserves are generally sufficient, and short-term demand is small.
Supplies to India’s largest precious metals processing plant, MMTC-PAMP, are currently disrupted, and logistics costs for new contracts from other regions have increased by 60-70% since the start of the war. The spot price of gold has increased by almost 20% since the beginning of the year and exceeded $ 5,000 per ounce.
