(Kitco News) - Asian demand has transformed the gold market this year, driving prices to record highs. While the market has recently retreated from those highs, Asia’s influence in the marketplace is expected to grow, according to the latest report from the Dubai Multi Commodities Centre (DMCC).
The DMCC highlighted that Dubai and the United Arab Emirates are uniquely positioned to serve as an important bridge between East and West. According to the report, the DMCC envisions the start of an "Asian Century" for gold, with a focus on developing a new gold economic corridor among BRICS nations, including the UAE.
“In recent years, we have witnessed historic shifts in the precious metals market, driven by Western sanctions that have forced record gold buying by central banks and led many countries to rethink their reliance on the US dollar,” said Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of the DMCC, in a statement. “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.”
The optimistic outlook comes as the UAE has seen significant growth in gold trading this year. The DMCC reported that $129 billion in gold flowed through Dubai in 2024, marking a 36% increase compared to the previous year.
The DMCC also noted that the UAE has become the second-largest gold trade hub worldwide, surpassing the London market.
“The report highlights that geopolitical challenges, including sanctions against Russia, have shaken the global financial economy, prompting countries worldwide to reconsider their reliance on the US dollar and the safety of their gold holdings,” the report said. “As a result, central banks have ramped up their gold purchasing activities and repatriated US-stored bullion to diversify away from the dollar, with some even using gold in place of the US dollar in trade transactions. This shift is driving gold prices to unprecedented levels, creating a ripple effect across the global economy.”
As gold’s role in the global economy continues to grow, the DMCC report also offered important recommendations to shape the market’s future growth.
The DMCC recommended enhancing transparency and regulation in the gold market. It also emphasized supporting digital innovation and improving access for emerging markets.
“Investment companies and fintechs should develop digital products that enable small-scale and young investors in emerging markets to access gold trading, expanding market participation,” the report stated.
Additionally, the DMCC called for further digitization of the gold market.
“Industry participants should collaborate to create global standards for digital gold products and blockchain systems to improve transparency, eliminate pricing inconsistencies, and reduce reliance on derivative products,” the report said.
