Amid Iran war Dubai selling gold at discount, but it’s bad news for India. Here’s why
&imwidth=600&imheight=450&format=webp&quality=medium "Amid Iran war Dubai selling gold at discount, but it’s bad news for India. Here’s why")
Representative image: Gold Photograph: (Combination created using images from Canva)
Why are gold traders in Dubai suddenly offering heavy discounts? Bullion is reportedly selling up to $30 per ounce below global prices amid the Iran war.
What does this mean for global markets and Indian buyers? Scroll down to read.
Gold traders in Dubai are offering bullion at steep discounts after the conflict in the Middle East disrupted flights and stranded shipments in one of the world’s key trading hubs.
How much discount is Dubai offering on Gold?
According to a Bloomberg report citing traders familiar with the situation, some dealers are selling gold at discounts of up to $30 an ounce compared with the global benchmark set in London. The unusual pricing reflects mounting logistical problems as suppliers struggle to move bullion out of the region.
Many buyers have paused new orders for now. With air travel disrupted and delivery timelines uncertain, traders say customers are unwilling to pay higher shipping and insurance costs without a clear guarantee the gold will arrive on time.
Flights grounded, shipments delayed
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Several gold shipments were still stuck in Dubai as of Friday, traders said. Some cargo began moving again only in the middle of the week as limited flights resumed.
The United Arab Emirates, and particularly Dubai, plays a central role in the global gold trade. The city is a major refining and export hub for bullion moving to buyers across Asia and also handles shipments arriving from Switzerland, the UK and several African producers.
But airspace in the region has been partially restricted amid a wave of Iranian missile attacks during the ongoing conflict between the United States, Israel and Iran.
Gold Shipments Stranded
Gold is usually transported in the cargo holds of passenger planes. With flights severely limited, traders have been reluctant to move high-value shipments overland to airports in neighbouring countries such as Saudi Arabia or Oman, citing security and logistical risks.
Also read | Pak man found guilty of Iran Revolutionary Guard backed revenge plot to assassinate Trump
Why is the discounted gold bad news for Indians?
The disruption has been felt in India, one of the biggest destinations for gold shipped out of Dubai.
Renisha Chainani, head of research at Augmont Enterprises Ltd., said "several cargo shipments have been delayed or stranded, leading to short-term tightness in the availability of physical bullion in India".
For now, however, Indian buyers appear in no hurry. Chirag Sheth, principal consultant for South Asia at Metals Focus, said India's domestic inventories remain comfortable after heavy imports in January. "As of now, there is ample stock," he said. "But if this drags on for a few months, then there will be a problem."
