How the UAE became the world's second-largest hub for gold trade

Dubai: In the ever-shifting world of commodities, few stories have glittered quite like the UAE’s rise in the gold trade.

Late last year, the nation overtook the UK to become the second-largest hub for global gold trade, clocking in over $129 billion in transactions. That’s not just a number—it’s a reflection of decades of bold investments.

For UAE residents, it’s easy to walk past Dubai’s Gold Souk or drive by a DMCC tower without realising that the country now sits at the center of global gold flows. But the road here wasn’t accidental.

Gold has always had a presence in Dubai’s economy. But in the 1970s and '80s, it was cities like Beirut and Kuwait that held the regional crown. That began to change when Dubai started investing heavily in its transport and trade infrastructure—most notably with the rise of Dubai International Airport and Jebel Ali Port.

By the early 2000s, Dubai wasn’t just trading gold—it was becoming a magnet for it.

The creation of the Dubai Multi Commodities Centre (DMCC) in 2002 added rocket fuel to that momentum. It gave gold traders a place to set up, scale, and do business in a free zone designed for the commodity trade. Today, DMCC is home to over 15,000 businesses and is a gold hub in every sense—from refining to logistics to trade.

One of the UAE’s key strengths has been government responsiveness. When VAT was introduced in 2018, many traders feared a drop in competitiveness. But authorities quickly rolled out a “VAT-free re-export” model, allowing gold and jewellery brought into the UAE for re-export to avoid tax if shipped out within 180 days.

Add to that government-backed credit facilities and flexible customs procedures, and it's clear why gold dealers find Dubai a much easier place to operate compared to other financial capitals.

For investors, this means fewer operational headaches and more focus on what matters—volume, margins, and growth.

It’s not just policy and logistics. The UAE also built trading infrastructure that puts it on par with global financial centers. The Dubai Gold and Commodities Exchange (DGCX), launched in 2005, offers futures contracts and risk-management tools that attract institutional players. It helps keep Dubai in step with New York, London, and Shanghai.

And as central banks around the world begin diversifying away from the U.S. dollar—often turning to gold—the UAE’s timing couldn’t be better. Global demand for gold is on the rise, and the country is right in the middle of it.

Trade deals have played a big role, too. The Comprehensive Economic Partnership Agreement (CEPA) with India allows for reduced tariffs on UAE-sourced gold, boosting demand from one of the world's biggest consumer markets. India is now allowed to import up to 160 tonnes of gold from the UAE at preferential rates, giving Dubai yet another competitive edge.

Meanwhile, the rise of BRICS nations—especially with newer entrants like Saudi Arabia—means the global gold trade is forming fresh corridors that increasingly bypass traditional Western centers. Dubai is rapidly becoming the meeting point for East and West in these new arrangements.

For UAE investors and businesses, this growth spells opportunity. Whether through direct gold investment, exposure to trading platforms, or even logistics and support services, the gold economy touches many sectors.

It also means that Dubai is a serious player in the global commodities game. And for a country that’s always prided itself on being a crossroads of trade, gold is proving to be one of its most valuable currencies—both literally and figuratively.