Gold Sold at $30 Discount in Dubai Amid Middle East Crisis

Gold traders in Dubai have started selling the precious metal at discounts of up to $30 per ounce below the London benchmark price, as logistical disruptions linked to the ongoing conflict in the Middle East affect supply chains.

The price cuts come as the regional crisis involving the United States, Iran and Israel continues to impact transportation and trade routes.

Supply Chain Disruptions Hit Gold Trade

Dubai is one of the world’s key hubs for gold refining and exports, supplying large volumes of bullion to markets across Asia, particularly India.

However, disruptions to air travel in the region have slowed the movement of bullion shipments. Gold is typically transported in the cargo sections of passenger aircraft, and flight restrictions have made it difficult for traders to move shipments out of the UAE.

According to industry reports, several consignments of gold remain delayed or stranded, creating short-term supply challenges in the physical bullion market.

Traders Offer Discounts to Reduce Costs

With shipments stuck and delivery timelines uncertain, traders have started offering gold at discounts to encourage buyers.

Market participants say the move also helps dealers avoid rising storage and financing costs associated with holding large quantities of unsold bullion.

Some flights have resumed limited operations since mid-week, allowing small quantities of gold to leave Dubai. However, logistics providers remain cautious about moving valuable cargo through alternate routes.

Land Routes Pose Additional Challenges

Transporting gold by road to airports in neighbouring countries such as Saudi Arabia or Oman has also been considered.

But traders and logistics firms say cross-border transportation involves security risks and complex logistics, especially for high-value cargo like bullion.

Impact on India’s Gold Supply

Experts say the disruptions could eventually affect supply to India, one of the largest consumers of gold globally.

According to Renisha Chainani of Augmont Enterprises, delays in shipments have created a temporary squeeze in the physical gold supply chain.

However, analysts say the impact may remain limited in the short term.

Industry consultant Chirag Sheth noted that India currently has adequate inventory levels, following heavy imports earlier this year.

“If the situation continues for several months, supply pressures may emerge,” he reportedly said.

Rising Costs for Gold Refiners

The ongoing conflict has also increased logistics expenses for refiners sourcing raw materials.

MMTC‑PAMP, one of India’s largest precious metals refineries, sources part of its doré (semi-refined gold) from mines in the Middle East.

Company officials said those supplies have been disrupted, and transportation costs for new sourcing agreements have risen by 60% to 70% since the conflict escalated.

Gold Prices Remain Volatile

Despite the discounts offered in Dubai, global gold prices remain elevated.

Spot gold prices have risen nearly 20% this year and are trading above $5,000 per ounce, although market volatility has increased amid geopolitical tensions and currency fluctuations.

Analysts say future price movements will largely depend on how long the regional conflict continues and whether trade routes stabilise in the coming weeks.