The UAE will become the Asian gold hub under the BRICS umbrella

Keywords:

• The Dubai Multi Commodities Centre’s “Future of Trade” report suggests that the UAE could become the Asian gold hub under the BRICS umbrella under the economic corridor of this bloc.
• The UAE has the best reasons to be a gold hub in Asia for many reasons including location, capabilities and infrastructure.
• The UAE is now the second largest gold hub in the world after Switzerland, with a volume that has grown by 36% annually recently.

According to a new report issued by the Dubai Multi Commodities Centre, the UAE is now in the best possible position to become the global gold trading hub with the opening of a new economic corridor between the BRICS members.

The report, entitled “The Future of Trade”, confirmed that the UAE can lead the era of Asian superiority in the gold trade, due to its important position.

The report indicated the possibility of the UAE becoming an alternative to traditional gold trading centers, especially since it is already the second largest gold center in the world after Switzerland, after it displaced the United Kingdom from this position in 2023, and Switzerland remains at the forefront of this scene.

The UAE joined the BRICS bloc earlier in 2024, which includes Brazil, Russia, India, China and South Africa, in addition to a group of countries that have recently begun to join.

The report indicated the importance of this bloc, which seeks to establish a new economic corridor for gold trade linking the BRICS countries, making the UAE a major hub for gold trade for this bloc.

Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of the Dubai Multi Commodities Centre, said:

“There have been many historical transformations in the precious metals market, driven by Western sanctions that have forced central banks to buy record amounts of gold and many countries to rethink their reliance on the dollar.”

Bin Sulayem stressed the importance of Asia, which has become a new corridor for gold through Asia, with Dubai at its center.

The value of gold trade in the UAE exceeds $129 billion, an increase of 36% year-on-year, explaining its presence as the second largest gold center in the world.

The UAE can also benefit from many things in addition to its strategic location to enhance its position as a global gold center, most notably:

The country’s robust regulatory framework.

The advanced infrastructure that connects East and West.

Innovative technical solutions in the precious metals market, where technology plays a fundamental role in reshaping the methods of extracting, trading and investing in gold, specifically the use of artificial intelligence in exploration and mining and tracking systems based on blockchain technology.

With China and India – the largest and second largest gold consumers – in the BRICS group, there will be changes in how the metal is traded and transported in the future.

Apart from BRICS, the UAE has also signed the Comprehensive Economic Partnership Agreement with India, which also means a significant increase in bullion purchases from here at a 5% import duty to India, compared to India’s import duty on the metal from other markets of 6% now after being reduced from 15% earlier in 2024.

This means that India can import up to 160 tonnes of gold from the UAE during the current fiscal year 2024-25.