Gold in Dubai is currently trading at a discount compared to London. This situation is attributed to flight restrictions caused by the conflict in the Middle East, along with stagnant demand for bullion in the local market. Given the uncertainty about the duration of the US-Iran war, market experts predict the gold market will remain volatile.
Reportedly, physical gold flows mostly through Dubai. The route is a major global trading hub that supplies gold to Hong Kong, Switzerland, and India. However, due to the geopolitical conflicts, this route was disrupted for almost 10 days. This comes after the US-Iran triggered widespread passenger flight cancellations across the Middle East.
Currently, the gold market remains at a discount. However, the thin trade variation varies widely by region. In support of this, “The price ranges from about $10 to $30 per troy ounce," said a Dubai-based bullion buyer.
Other reports suggest that demand is weak in both India and the Middle East, despite both countries being major consumers of Gold bullion. The reduced demands mainly come from price volatility, leading buyers to delay purchases.
As the US-Iran conflict continues, the global gold market is facing serious instability. Some highlights include a 6% reduction in spot gold prices in London since the initial rise at the start of the conflict on February 28, 2026. Additionally, gold bullion was priced at $5,109 per troy ounce. Similarly, the oil prices also saw a sudden hike.
"The known unknowns - conflict duration, escalation trajectory, and the macro inflation pass-through - remain unresolved," Nicky Shiels, head of metals strategy at MKS PAMP, explained while speaking about the current scenario. He also believes the gold market is in a worse position than the oil market.