Gold in Dubai Sold at Discount Amid Iran War

Gold traders in Dubai are reportedly offering bullion at discounted prices as ongoing tensions related to the Iran conflict disrupt flights and slow the movement of precious metals from the region.

According to market participants, some traders have reduced prices by as much as $30 per ounce compared with global benchmark prices in London. The discounts are being offered as shipments remain delayed and transportation options remain limited.

Flights Disrupted, Shipments Delayed

The disruption is linked to restrictions in air travel after missile activity in the region affected parts of United Arab Emirates airspace. As a result, several flights carrying high-value cargo such as gold have been delayed.

Gold is usually transported in the cargo sections of passenger aircraft. With fewer flights operating from the region, logistics companies and traders have faced difficulties moving bullion out of Dubai, one of the world’s major trading hubs for precious metals.

Market sources said that while some shipments have begun moving again on flights departing this week, several consignments remain stranded.

Traders Offer Discounts to Move Inventory

Due to shipping uncertainties, some buyers have reportedly paused new orders, particularly because insurance and transportation costs have increased significantly.

Rather than paying ongoing storage and financing costs, some traders are choosing to sell existing stocks at discounted rates to move inventory.

Dubai plays a crucial role in the global gold trade, acting as a key distribution centre for shipments headed to Asia, as well as a transit point for gold coming from Switzerland, the United Kingdom, and parts of Africa.

Impact on India’s Gold Supply

India, one of the world’s largest consumers of gold, imports a large share of its bullion from Dubai.

According to Renisha Chainani, head of research at Augmont Enterprises Ltd., delays in shipments have created short-term tightness in physical gold availability in India.

However, market experts say the immediate impact may be limited because India currently holds significant gold inventories following strong imports earlier in the year.

Chirag Sheth, principal consultant for South Asia at Metals Focus, noted that there is currently sufficient stock available in the country.

He added that supply issues could become more serious if shipping disruptions continue for several months.

Logistics Costs Rising

Refiners have also reported challenges sourcing doré, a semi-refined form of gold typically produced at mine sites.

Samit Guha, CEO and Managing Director of MMTC-PAMP, said some supplies from the Middle East have been affected. For alternative contracts sourced from other regions, logistics expenses have reportedly increased by 60% to 70% since the conflict began.

Gold Prices Remain Volatile

Despite the logistical challenges, spot gold prices have remained strong this year. The precious metal has risen significantly in global markets, though recent trading has been volatile as currency movements, particularly a stronger US dollar, influence prices.

Industry observers say the situation in the Middle East will remain an important factor affecting the global gold supply chain and shipping routes in the coming weeks.