Dubai Gold Discounts Rise Amid Middle East War
- Dubai gold discounts announced as airspace closure halts bullion exports
- Gold transport disruption affects Dubai market and India imports
Dubai’s gold market is witnessing unusual conditions as traders announce large discounts on gold despite rising global prices. The development comes amid the ongoing war in the Middle East. Dubai, widely known as the world’s gold hub, is seeing traders reduce prices to clear stock because transportation systems have been disrupted.
The situation emerged after partial closure of UAE airspace due to fears of Iranian missile attacks. As a result, air services have been halted and bullion exports from Dubai have slowed sharply. Gold is usually transported through the cargo sections of passenger flights. However, with flights cancelled, traders are struggling to move their inventory to international markets.
Market sources say traders are now offering discounts of up to $30 per ounce above the London benchmark price. In local terms, the reduction is around Rs. 100 per gram. Traders say the discounts help them reduce stock because they cannot bear the cost of storing large quantities of gold during the disruption.
Dubai plays a major role in refining and exporting gold to Asian and African countries. However, the shutdown of key air routes has disrupted this trade. Although it is technically possible to move gold by road to nearby countries such as Saudi Arabia or Oman and export it from there, traders are reluctant to take that route. They cite concerns about border checks, security risks, and rising insurance expenses.
Refinery experts say logistics costs have increased sharply since the war began. According to industry estimates, transport and related expenses have risen by about 60 to 70 percent. Therefore, traders prefer to reduce stock quickly rather than hold large quantities of gold.
India is one of the world’s largest importers of gold and relies heavily on supplies from Dubai. Due to transport disruptions, the availability of physical gold in India has decreased slightly. However, analysts say there is no immediate cause for concern. India imported a large quantity of gold in January, and sufficient stock remains available for now.
Experts also warn that the situation could change if the war continues for several months. In that case, supply disruptions could intensify and gold prices in India may rise significantly.
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