United Arab Emirates (Dubai) - Market Introduction

Introduction

Dubai, the trading centre and port at the southern end of the Arabian Gulf has been a major regional gold and silver market since the early 1960s. Over the last 35 years it has imported annually an average of over 155 tonnes (5 million oz), serving its Gulf neighbours and, primarily, India and Pakistan. The trade has been mainly in ten tola bars for India, but kilobars are also important for re-export to such countries as Saudi Arabia and in local jewellery manufacture.

Ten tola bars or 'biscuits' are most commonly
traded in Dubai (Credit: courtesy PAMP S.A.)

The steady rise in imports in the 1990's reflected the growing demand in India, which Dubai initially continued to supply once official imports were permitted in 1992. But a new system of general import licences for India from 1997, with banks in India importing direct from the international market, has reduced Dubai's trade and the record import of almost 650 tonnes in 1997 is unlikely to be repeated. Since 1998, customs statistics have no longer been published. However, it is estimated that in the following year, 1999, imports reached a little under 40% of their 1997 peak, and then in 2000 and 2001 a little over 40% of this peak.

Dubai Imports (official customs data)

Date

1990

1991

1992

1993

1994

1995

1996

1997

1998

Tonnes

161

166

284

228

257

314

345

646

347

Million oz

5.0

5.1

9.0

7.3

8.2

10.1

11.1

20.0

11.1

The physical gold business goes through bullion banks such as Standard Bank and local traders and exchange houses.