Gold flows to Dubai disrupted after US-Israeli strikes halt flight operations

Spot prices rose amid expectations of safe-haven inflows, with further impact dependent on the duration of the disruption

Dubai: Physical gold flows to and from Dubai’s bullion trading hub are expected to be curbed in the coming days as airlines cancelled flights following US and Israeli strikes on Iran and Tehran’s retaliation, metals industry sources have said.

Dubai’s trading hub supplies gold to Switzerland, Hong Kong and India, one of the largest consumers. Gold is transported by air due to security and insurance considerations linked to its value-to-weight ratio. “It looks like most, if not all, airlines have cancelled their flights, so not going to be any gold moving for a couple of days,” one of the sources said.

The impact on global supply will depend on the duration of the disruption, the sources said. They declined to be named as they are not authorized to speak to the Press.

Spot gold prices closed have gone up to their highest since January 30 and analysts expect safe-haven inflows into bullion.

Another source said trading likely to be driven by financial flows across markets in Shanghai, London and New York rather than physical movement through regional hubs.

“The major locations – China, India, New York, London and Zurich – are still okay,” a precious metals trader said.

Dubai plays a central role in linking Asian and European gold markets. Any extended suspension of flights could delay shipments between producing and consuming regions. Market participants said the situation remains under assessment and that further developments in the region will determine how quickly transport routes normalize.

Retail Jeweller ME News