The UAE is solidifying its position as a global hub for gold trade, leveraging its strategic advantages and innovative practices to reshape the industry.

According to the latest report by the Dubai Multi Commodities Centre (DMCC), titled “Trade, Technology and Markets in Transition,” the UAE surpassed the United Kingdom in 2023 to become the world’s second-largest gold trading hub.

With trade volumes exceeding $129 billion, marking a 36% increase over the previous year, the country is rapidly emerging as a key player in the precious metals market.

The report outlines the emergence of an “Asian century” for gold, driven by a shift in geopolitical and economic dynamics.

Central to this transformation is the development of a gold economic corridor among BRICS nations, including the UAE, offering an alternative to traditional trade centres.

Geopolitical Shifts Driving Change

Geopolitical tensions and global sanctions, particularly against Russia, have prompted central banks worldwide to reconsider their reliance on the US dollar and to prioritize gold reserves.

Many countries have increased gold purchases and repatriated bullion stored in the United States, while some are even using gold in place of the US dollar for trade transactions.

This global shift has propelled gold prices to unprecedented heights, with ripple effects across international markets.

The UAE, leveraging its advanced infrastructure, strategic location, and robust regulatory framework, is emerging as a bridge between East and West, reshaping the precious metals trade.

Technology Transforming the Gold Industry

The DMCC report highlights the growing role of technological innovation in transforming the gold trade.

Advances such as AI-driven exploration, autonomous mining, blockchain-based tracking systems, and digital gold investment products are reshaping the way gold is sourced, traded, and invested in.

These innovations, the report notes, are critical for improving efficiency, reducing costs, and enhancing environmental and social governance (ESG) standards across the supply chain.

Strategic Recommendations for Growth

To sustain and accelerate its growth, the DMCC report offers a range of strategic recommendations for governments and businesses:

• Enhance Transparency and Regulation: Strengthening provenance measures and regulatory oversight, as exemplified by the UAE’s government-led model, can ensure accountability and curb illicit trade.
• Facilitate Trade Liberalisation: Reducing tariffs and customs barriers, expanding trade agreements such as the UAE-India Comprehensive Economic Partnership Agreement (CEPA), and pursuing bilateral accords can enhance liquidity and transparency.
• Support Artisanal Mining: Formalising artisanal and small-scale gold mining (ASGM) with targeted training and finance can improve safety, environmental standards, and economic outcomes.
• Invest in Technology: Integrating AI and advanced technologies can reduce costs and improve productivity, benefiting both large-scale and artisanal miners.
• Promote Digital Innovation: Developing digital gold products and blockchain systems can expand market participation and improve transparency.

UAE at the Forefront

The report underscores the UAE’s pivotal role in driving global gold trade transformation. By combining regulatory excellence, cutting-edge technology, and strategic partnerships, the nation is not only bolstering its position as a global gold trade leader but also setting benchmarks for the future of the industry.

As the global gold market undergoes significant changes, the UAE is poised to remain at the forefront, redefining the dynamics of this crucial sector.