Dubai Gold Flows Halted Amid Flights Disruption Following US-Israeli Strikes on Iran

Dubai Gold Hub Disrupted by Flight Cancellations

Dubai's position as a major gold trading hub is set to be severely impacted in the coming days due to flight cancellations resulting from the ongoing conflict between the US, Israel, and Iran. The disruption is expected to curb physical gold flows to and from the region, which supplies gold to key markets such as Switzerland, Hong Kong, and India.

The value-to-weight ratio of gold makes air transportation a necessary and expensive option, leading to security and insurance concerns. As a result, airlines have canceled their flights, effectively halting gold transportation for the next couple of days. This disruption will likely have a significant impact on the global gold supply, with the extent of the effect dependent on the duration of the disruption.

Spot gold prices closed at $5,277 per troy ounce on Friday, a 1.7% increase from the previous day, and their highest level since January 30. Analysts expect safe-haven inflows into bullion once the market opens on Monday, potentially driving prices even higher. The record high for gold was $5,594.82 on January 29.

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The market on Monday is expected to be dominated by financial flows, with key locations such as China, India, New York, London, and Zurich remaining operational.