Partial flight resumptions restore some gold flows from key hub Dubai

The global gold market saw a glimmer of stability this week as physical gold shipments partially resumed from Dubai, one of the world's most critical trading hubs. According to sources familiar with the matter, the reopening of select flight paths has allowed the flow of bullion to restart, following a near-total standstill triggered by the outbreak of the U.S.-Israeli war with Iran on February 28.

As a primary supplier to major markets in Switzerland, Hong Kong, and India, Dubai's logistical health is vital to the industry. Because of its high value and relatively low weight, gold is almost exclusively transported via passenger and cargo aircraft for security and insurance reasons. However, data from FlightRadar24 indicates that recovery is still in its early stages, with Dubai's air traffic hovering at just 37% of its usual volume as of Thursday.

The ongoing constraints are significantly inflating the cost of doing business. Shippers are currently grappling with:

Elevated Insurance Premiums: Limited flight availability and regional conflict risks have driven up coverage costs.

Increased Ground Logistics: Transporting bullion to functional airports or secure storage during disruptions has added a layer of expensive ground handling.

Logistical Backlogs: Even with resumed flights, the "bottleneck" effect means that priority is being given to high-value contracts, leaving smaller traders in wait.

In India, a primary consumer of Dubai’s gold, the resumption of supply has met with a lukewarm reception. Bullion is currently trading at a discount compared to London prices, a sign that local demand remains fragile. Market dealers in Mumbai suggest that while the influx of gold is a positive sign, high price volatility and regional uncertainty are expected to keep Indian buyers on the sidelines for at least the next two weeks.