Physical gold flows to and from Dubai’s trading center will be significantly disrupted in the coming days after airlines canceled flights following attacks by the U.S. And Israel on Iran and Tehran’s retaliatory strikes, according to three sources in the precious metals industry.
Dubai serves as a major gold supply hub for Switzerland, Hong Kong, and India, one of the world’s largest consumers. Due to security and insurance concerns, given the high value and low weight of the metal, gold is almost exclusively transported by air.
“most, if not all, airlines have canceled flights, so there will be no gold moving for a few days,” one of the sources told News.ro.
The impact on global supply will depend on the duration of the disruption, the sources said, requesting anonymity as they are not authorized to discuss the matter with the press. The disruption comes as gold prices have already been climbing amid geopolitical uncertainty.
The spot price of gold closed up 1.7% on Friday, at $5,277 per ounce, reaching its highest level since January 30. Many analysts anticipate further capital inflows into gold, considered a safe-haven asset, when markets open on Monday. The all-time high was reached on January 29, at $5,594.82.
Another trader said the market will be driven on Monday by financial flows from Shanghai, London, and New York.
“The major centers, namely China, India, New York, London, and Zurich, are still functioning,” this source stated. The continued operation of these key financial hubs may help to mitigate some of the impact of the disruptions in Dubai, though the reliance on air transport for gold remains a critical factor in global supply chains.
Editor : A.P.
