Gold prices rise due to logistical collapse in Dubai — FT
The military conflict in the Middle East has led to major disruptions in global gold and silver supplies.
This was reported by the Financial Times.
Due to the suspension of air traffic with Dubai, which is a key logistics hub, the market is on the verge of a new wave of price volatility.
Dubai plays a critical role in global trade, handling about 20% of the world's gold turnover. The emirate is a major transit point for metal flows from Europe to Asia, as well as supplies from the African continent.
The suspension of flights following the US and Israeli attacks on Iran has effectively blocked these routes.
India, for which Dubai serves as the main transit point, has been hit hardest by the logistical collapse.
‘The availability of gold became a problem after flights were suspended. This caused a sharp jump in domestic prices in India,’ said John Reid, senior market strategist at the World Gold Council.
According to him, in just a few days, Indian prices, which were previously significantly lower than world prices, caught up with London quotations.
The peculiarity of gold transportation is that it is usually transported by passenger planes in batches of up to 5 tonnes. At the current cost of the metal, one such flight is estimated at over $800 million.
Currently, airlines are giving priority to perishable cargo, leaving precious metals in warehouses.
The situation with silver has proved even more complicated, especially for shipments from London. Significant quantities of metal have accumulated at Heathrow Airport, which now have to be formally withdrawn from customs for rerouting.
This is happening against the backdrop of a critical silver shortage in China, where stocks have fallen to a ten-year low due to frenzied demand.
As a reminder, gold rose to a one-month high amid escalating tensions in the Middle East.
Oil prices are also rising due to the conflict in the Middle East and risks to the Strait of Hormuz.
