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    • UAE to become one of world’s largest gold trading hubs after overtaking UK – News
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    UAE to become one of world’s largest gold trading hubs after overtaking UK – News

    Umito Posted on

    Photo KT: Shihab

    Photo KT: Shihab

    The UAE is set to become one of the most important hubs for gold trading in the coming years, a recent DMCC report has revealed.

    This position has been significantly strengthened by the UAE overtaking the UK in 2023 to become the second largest gold trading hub in the world, with over $129 billion in total trade. , an increase of 36% compared to last year.

    The report titled “Trade, Technology and Markets in Transition” further predicts the advent of an “Asian Century” for gold, with a particular focus on the development of a new gold economic corridor between BRICS countries, including the UAE, which can provide an alternative to traditional gold trading centers.

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    The report provides key insights into the current state of the global gold and silver markets, while highlighting the world’s geopolitical challenges. These include sanctions against Russia that have shaken the global financial economy, prompting countries around the world to reconsider their dependence on the US dollar and the security of their gold reserves.

    For this reason, central banks around the world have stepped up their gold buying activities and repatriated bullion stored in the United States to diversify away from the dollar, with some even using gold in place of the US dollar in commercial transactions. This shift is pushing gold prices to unprecedented levels, creating a ripple effect on the global economy.

    The UAE is responding to these challenges by becoming a key player in the global precious metals market, leveraging its strategic location, strong regulatory framework and advanced infrastructure to connect East and West and reshape the gold trade.

    The report also explores the growing importance of technological innovation in the precious metals market. From AI-powered autonomous exploration and mining techniques to blockchain-based tracking systems and digital gold investment products, technology is playing a crucial role in reshaping the way gold is obtained, negotiated and invested.

    Recommendations for governments, businesses

    The report further presents a number of important recommendations for governments and businesses to help evolve the sector and shape the next phase of its growth:

    • Improve transparency and regulation: Governments, exchanges and refineries should strengthen gold provenance measures and ensure more transparency, with the UAE model of transferring oversight to government agencies serving as an example for stricter regulation and accountability.
    • Facilitate trade liberalization: reduce customs duties and remove customs barriers to combat smuggling, increase liquidity and improve price determination. Expanding trade agreements, such as the UAE-India CEPA, and entering into bilateral agreements will ensure smoother and more transparent trade.
    • Support the formalization of ASGM: Rather than banning ASGM gold, targeted financing, training and access to formal markets should be provided to improve security, environmental standards and economic development while curbing smuggling .
    • Invest in AI and technology: Mining companies should invest in AI and advanced technologies to reduce costs, improve production and strengthen ESG standards. Leveraging technology can also help artisanal miners eliminate the use of mercury.
    • Driving digital innovation and access to emerging markets: Investment firms and fintechs should develop digital products that enable small and young investors in emerging markets to access gold trading, thereby expanding the market participation.
    • Establish global standards for digital and blockchain solutions: Industry players should collaborate to create global standards for digital gold products and blockchain systems to improve transparency, eliminate pricing inconsistencies, and reduce dependence on derivatives.

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