Daily Gold Market Report

UAE Emerges as Major Hub for Russian Gold Amid Western Sanctions
From London to the Gulf: The Reshaping of Gold Trade Dynamic

(USAGOLD – 9/25/2023) Gold and Silver open up slightly down from last week’s close. Gold starts off the week at $1924.12 down $1.11 from last weeks close. Silver is trading at $23.47, down 9 cents from last weeks close. The United Arab Emirates (UAE) has emerged as a significant trade center for Russian gold following the imposition of Western sanctions on Russia due to the Ukraine conflict. Following the conflict’s initiation, many global banks, logistics companies, and precious metal refiners ceased handling Russian gold, which was traditionally sent to London, a major gold trading and storage hub. However, Russian gold producers swiftly identified new markets in nations that hadn’t sanctioned Moscow, notably the UAE, Turkey, and China.

For the US market, this shift in Russian gold trade dynamics has implications. The US has cautioned countries, including the UAE and Turkey, that they might lose access to G7 markets if they engage with entities under US sanctions. There’s a potential risk that Russian gold could be melted, recast, and then reintroduced into US and European markets, obscuring its origin. Such a scenario underscores the importance of due diligence for both sovereign and private mints to ensure compliance with sanctions, while this also underlines the importance of choosing a reputable, trusted precious metal firm that knows the source of the metal. Reuters reports, the UAE’s gold industry has been thriving, with the Russian gold imports accounting for merely 10% of its total imports, emphasizing its role as a major bullion and jewelry exporter.
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