The resumption of some flights from Dubai has allowed gold flows from this major global trading hub to partially resume this week, three sources familiar with the matter told Reuters on Friday.
Deliveries of physical gold to and from Dubai – a major hub supplying Switzerland, Hong Kong and India – have been affected since the start of the US–Israeli war on Iran on February 28, which triggered widespread passenger flight cancellations across the Middle East.
The traffic remains constrained, but some of the deliveries have restarted, one of the sources said. He declined to be named because he was not authorised to speak to media.
Gold travels by plane due to security and insurance issues owing to its high value-to-weight ratio. Tracking data on FlightRadar24 showed Dubai flights at 37% of the usual traffic as of Thursday.
Reduced flight traffic is increasing insurance and ground transportation costs for bullion deliveries, another source said.
Easing some of the disruption for India, a key bullion consumer, gold is trading at a discount to London prices, and traders expect India’s demand to remain subdued for the next two weeks.
“Only limited flights (from Dubai) have resumed so far, which is helping bring in some bullion, but demand in India is still weak,” said a Mumbai-based dealer with a private bank.
(By Polina Devitt and Rajendra Jadhav; Editing by Pooja Desai)
