Gold stuck in Dubai is being sold at discount as war widens

Gold is being offered at a steep discount in Dubai, as the war in the Middle East grounds flights and hampers suppliers’ ability to move bullion out of the key trading hub.

Many buyers have stepped back from new orders, unwilling to pay exceptionally high shipping and insurance costs with no guarantee of prompt delivery.

As a result, rather than paying indefinitely for storage and funding, traders are offering discounts of as much as US$30 (S$38) an ounce to the global benchmark in London, according to people with knowledge of the matter, who asked not to be named discussing market information.

Many shipments remained stranded on March 6, the people said, although some bullion had been loaded onto flights leaving Dubai from the middle of this week.

The United Arab Emirates, and Dubai in particular, is an important centre for refining and exporting bullion to buyers across Asia, as well as a conduit for shipments from Switzerland, the UK and several African countries.

Its airspace has been partially closed due to a barrage of Iranian missiles as the US-Israeli war with Tehran extends for a seventh day with no sign of resolution.

Gold is typically transported in the cargo holds of passenger aircraft. Even with flights from the UAE severely restricted, traders and logistics firms are reluctant to transport high-value cargoes overland to airports in countries such as Saudi Arabia and Oman, due to the risks and complications involved, particularly when transiting land borders.

While the Dubai Good Delivery standard – the standard of gold bars widely used locally and regionally – is typically traded at a discount to the London prices, the shipping bottleneck is making the gold even cheaper.

“Several cargo shipments have been delayed or stranded, leading to short-term tightness in the availability of physical bullion in India,” said Dr Renisha Chainani, head of research at Augmont Enterprises, one of India’s largest gold dealers.

But buyers in India – one of the largest consumers of gold shipped from Dubai – can afford to wait, with near-term demand relatively muted and inventories swollen by a large volume of imports in January, Metals Focus principal consultant for South Asia Chirag Sheth said.

“As of now, there is ample stock,” he said, “but if this drags on for a few months, then there will be a problem.”

Spot gold has gained nearly a fifth so far in 2026, gaining a footing above $5,000 an ounce, though trading has been choppy and the metal has come under pressure this week as the dollar has strengthened. It was last traded at around $5,172 an ounce.

There are also some signs that refiners are encountering challenges in sourcing doré – semi-refined gold bars typically cast at the mine site.

India’s largest precious metals refinery, MMTC-PAMP, gets around 10 per cent of its doré from a mine in the Middle East, but supplies have been disrupted, said Chief Executive Officer and Managing Director Samit Guha. For new contracts supplied from elsewhere, logistics costs have soared by 60 per cent to 70 per cent since the war began, he said. BLOOMBERG