The UAE is becoming one of the major gold trade hubs around the world with significant growth in trade value. In 2023, the UAE surpassed the United Kingdom, becoming the second-largest gold trade hub worldwide, with over $129 billion in total trade, a rise of 36 percent over 2022.
The latest report from the Dubai Multi Commodities Center reveals that major shifts in the global gold trade will likely propel an ‘Asian century’ for gold, with a particular focus on the development of a new gold economic corridor among BRICS nations, including the UAE, that can provide an alternative to traditional gold trade centers.
“In recent years, we have witnessed historic shifts in the precious metals market, driven by Western sanctions that have forced record buying of gold by central banks and a rethink by many countries when it comes to their reliance on the U.S. dollar. We are seeing a new gold corridor form across Asia, with Dubai at its center – exemplified by the UAE’s rise to become the world’s second-largest gold trading hub last year,” stated Ahmed Bin Sulayem, executive chairman and CEO of DMCC.
Factors propelling gold’s value
Geopolitical challenges including sanctions against Russia have shaken the global financial economy, prompting countries worldwide to reconsider their reliance on the U.S. dollar and the safety of their gold holdings.
As a result, central banks worldwide have ramped up their gold purchasing activities and repatriated U.S.-stored bullion to diversify away from the dollar, with some even using gold instead of the U.S. dollar in trade transactions. This shift is driving gold prices to unprecedented levels, creating a ripple effect across the global economy, stated the report.
As a result, the UAE is emerging as a key player in the global precious metals market, leveraging its strategic location, robust regulatory framework, and advanced infrastructure to bridge East and West and reshape the gold trade.
Technology’s role in driving growth
The DMCC report explores a key aspect of growth in the market, noting the growing importance of technological innovation in driving trade. From AI-driven exploration and autonomous mining techniques to blockchain-based tracking systems and digital gold investment products, technology is playing a crucial role in reshaping how gold is sourced, traded, and invested in.
“As the report highlights, this is a time of opportunity and challenge, and as the gold industry navigates its place in a rapidly evolving landscape, we look forward to working with our members and partners as we continue to build the world’s premier ecosystem for the global precious metals trade from Dubai,” stated Feryal Ahmadi, chief operating officer at DMCC.
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Driving the precious metal market’s evolution
The Future of Trade report also outlined a number of important recommendations for governments and businesses to help drive the evolution of the industry and shape the next phase of its growth. The recommendations include enhancing transparency and regulation, facilitating trade liberalization, supporting formalizing ASGM, investing in AI and technology, boosting digital innovation and access for emerging markets, and establishing global standards for digital and blockchain solutions.
Governments, exchanges and refineries should strengthen gold provenance measures and ensure more transparency, with the UAE’s model of transferring oversight to government bodies serving as an example of stricter regulation and accountability. Lowering tariffs and removing customs barriers on gold also combats smuggling, enhances liquidity, and improves price discovery. Expanding trade agreements, like the UAE-India CEPA, and pursuing bilateral agreements will also ensure smoother, more transparent trade.
Rather than banning ASGM gold, countries must provide targeted finance, training, and access to formal markets to improve safety, environmental standards, and economic development while curbing smuggling. In addition, miners should invest in AI and advanced technologies to reduce costs, improve production, and enhance ESG standards. Leveraging technology can also help artisanal miners eliminate mercury use.
The report sets the stage for the upcoming Dubai Precious Metals Conference (DPMC), one of the most significant events in the global gold and precious metals industry. The conference will bring together influential business leaders, government representatives, industry experts, and other main stakeholders to discuss the future of the precious metals landscape.
