Gold with a big discount. The Gulf War forced Dubai to cut prices

The United Arab Emirates offers gold bars at steep discounts of up to $30 per ounce. The reduction was forced by the ongoing war in the Persian Gulf, which stopped most international flights and, with them, metal transports, Bloomberg reported.

On Friday and Saturday, several shipments of gold that were supposed to be delivered to foreign buyers got stuck in Dubai, but many people refrained from making purchases so as not to incur very high transport and insurance fees and have no guarantee that the gold will reach them on the agreed date.

Gold is usually transported in the cargo hold of passenger planes. Due to the war in the region, flights in most Gulf countries are still severely restricted, and the land route is too risky and crosses many borders. For this reason, sellers, wanting to avoid paying the high costs of storing gold in bank vaults, have opted for discounts of up to $30 per ounce compared to the reference price in London.

Supply disruptions are being felt most acutely in India, which is one of the largest buyers of gold from Dubai.

– Several shipments were delayed or stuck at airports, which actually led to a reduction in the availability of gold in India – admitted Renisha Chainani from Augmont Enterprises, one of the largest gold dealers in India, in an interview with the India Times on Saturday.

– There are significant reserves for now, but if the war drags on for several months, then there will be a problem – Chirag Sheth from a London-based consulting company dealing with precious metals market research told the Indian daily on Saturday. (PAP)

tebe/ akl/