Gold in Dubai: With increasing tension in the Middle East, there are signs of disruption in the global market. As the atmosphere of war in Iran is deepening, the crisis is deepening. Meanwhile, there is a city which is selling gold cheaply.

On one hand, there is a fear of rising prices of gold as a safe investment in this situation of war, on the other hand, gold is being sold here at the lowest price. Here we are talking about Dubai, which is the international gold trade capital. Amidst the disruptions in logistics and falling demand, gold is being sold at huge discounts in Dubai.

Why is there a discount on gold in Dubai?

Dubai is known as the ‘City of Gold’ because of its large bullion trading market. Dubai usually sells gold to India at a premium rate due to low import duty and taxes. Now the question comes that why is Dubai selling gold cheaply in this environment of war?

In fact, due to the closure of airspace and cancellation of flights amid the attacks by America and Israel on Iran and retaliation by Tehran, Dubai businessmen are not able to send their stock out of the country. Due to continuous accumulation of stocks and stoppage of exports, Dubai dealers are offering discounts of up to $ 30 per ounce to clear their goods.

Another reason for giving discount on gold is that in this environment of uncertainty due to war, the arrival of tourists in Dubai has reduced. Due to this, purchases have also reduced and gold has become cheaper.

Its impact on India

India imports a large part of its gold requirement from other countries. A large part of the gold that India imports passes through Dubai. Any shortage in supply due to war in Iran will immediately impact India.

Analysts are saying that if this situation continues, it may create supply problems for India’s gems and jewelery sector. If the supply of gold slows down, prices may increase in India. On top of that, the peak season of weddings and festivals is just around the corner in India, so any further rise in gold prices will impact consumer demand.

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Dubai, also known as ‘City of Gold’, has been considered as the most preferred for investment from traditional weddings to religious events and for investment. But after its price in the international market has crossed a record of $ 3,400 an ounce, people in Dubai are now starting to opt. Instead, people are now giving preference to diamond in Dubai or buying light gold jewelery.

Andrew Nylore, the head of the Middle East and Public Policy at the World Gold Council (WGC), said- Sona has already been most liked as an investment. In such a situation, the American tariff and other factor have done more ghee in it. Apart from this, the increasing demand for gold jewelery also has a different effect on it.

People running away from sleeping in Dubai

He said, two types of effects are being seen in Dubai. First, money is being invested as the safest for investment, on the other hand, due to high prices, the demand for jewelery is declining. In Gold Souk, Dubai, a seller told Reuters that they are looking at the trend that when the price of gold is currently increasing, people are looking towards its other option.

A shopkeeper working in Damas Jewelery said, due to the huge increase in gold prices, its buyers have come down significantly these days. While a woman who came to Gold Souk said, it is becoming difficult to afford gold, so it is better to take diamond instead of it.

Gold purchase declines in UAE

Dubai has been the most favorite place for gold buyers for the last about 80 years. According to WGC, the price of gold has increased by about 27 percent last year. Due to this, the demand for gold jewelery in UAE has declined by about 13 percent, while globally decreased by 11 percent.

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