Like much of the east gold maintains an important role in society here. It is still a common form of saving – particularly in jewellery form much like in India, (who also happens to be Dubai’s largest customer when it comes to gold).
A long central semi-open air hallway is littered with over 300 gold shops lined up one after the other. You wonder how any of them make any money! Guess it shows just how much demand there is here.
Speaking of demand, according to a recent report $75 billion of gold, or about 40% of the worlds physical bullion exchanged, was traded through Dubai last year! Quite a staggering number for a country that doesn’t mine any gold. Of course this figure relates to trade via the Dubai Multi Commodities Centre (DMCC) not the gold street markets or Gold and Diamonds Park. Although much of the gold sold at these markets would be included in these figures as it would likely initially trade via the DMCC to arrive in Dubai.
John Hathaway reported that Dubai has become one the world’s major gold trade centres over the past 10 years and he reckons it will increase its trade volumes even more yet.
This growth demonstrates the “significant shift in the balance of global demand flows” – that is the shift in demand from West to East. On top of this other reasons for the massive growth in gold trade via Dubai include trade transparency, its strategic location, and a rising number of tourists.
Source Gold Survival Guide
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