Dubai gold trades at rare discount as war disrupts global bullion flows

Wednesday 11 March 2026 - 09:50

By: Dakir Madiha

Dubai gold trades at rare discount as war disrupts global bullion flows

Gold is trading at an unusual discount in Dubai, one of the world’s most important hubs for physical bullion trade, as conflict involving the United States, Israel, and Iran disrupts transport routes and breaks the supply chains linking the precious metal to global markets.

Traders in Dubai are offering discounts of up to 30 dollars per troy ounce compared with the London benchmark price, according to Bloomberg. The price gap has persisted for about ten days as buyers cancel new orders and dealers attempt to avoid rising storage and financing costs. Such a discount is rare for Dubai, which typically trades at a premium and handles roughly 20 percent of global gold flows.

The disruption began after coordinated United States and Israeli air strikes against Iran on February 28 triggered retaliatory missile attacks and led to partial closures of regional airspace. The situation forced widespread flight cancellations, including at Dubai International Airport, a key transit point for gold shipments moving from London and Switzerland to buyers in India and across Asia.

Gold is normally transported in the cargo holds of passenger aircraft, with a single flight capable of carrying up to five tons of bullion. With commercial flights suspended or reduced, shipments have been delayed, leaving cargo stranded.

A Dubai based precious metals trader told Reuters that the market continues to operate at a discount but with limited trading volumes, with prices fluctuating between about 10 and 30 dollars below the London benchmark.

Some gold shipments resumed departures from Dubai by the middle of last week, but many consignments remained stuck by Friday, according to people familiar with the situation cited by Bloomberg. Attempts to reroute deliveries over land through Saudi Arabia or Oman have been constrained by the security and logistical risks involved in transporting high value cargo across borders.

Weak demand has also contributed to the price gap. Buyers in India, one of the world’s largest gold consumers, and across the Middle East have delayed purchases amid price volatility and uncertainty about how the conflict may evolve.

Spot gold prices in London have fallen about six percent from the initial safe haven surge that followed the February 28 strikes, stabilizing within a trading range around 5,100 to 5,200 dollars per ounce.

Nicky Shiels, head of metals strategy at MKS PAMP, said key uncertainties remain unresolved, including the duration of the conflict, the potential for further escalation, and broader economic consequences such as inflation. She noted that the discount in Dubai resembles pricing distortions seen during the Arab Spring in 2011.

The situation has exposed structural vulnerabilities in the global gold logistics network. John Reade, senior market strategist at the World Gold Council, warned that the suspension of flights in the Middle East has made the availability of physical gold a growing concern.

Analysts at StoneX said regional price premiums could shift as Dubai’s role as a central distribution hub for bullion remains temporarily constrained. If the conflict continues, the disruption could push prices higher in Asian markets and prompt a reassessment of the concentrated logistics infrastructure that underpins the global gold trade.