Home Insights & Advice What are the best places for trading gold in Dubai?

What are the best places for trading gold in Dubai?

by Marcus Briggs
6th Nov 19 11:08 am

If you’re looking for the best places for trading gold in Dubai, then you have a number of options depending what type of trade you want to pursue.

The Dubai Gold and Commodities Exchange (DGCX) is the best place to start if you are an investor, while the Dubai Gold and Jewellery Group may be the better option if you are looking for wholesale or retail opportunities.

Whichever market you are trading in, Dubai is likely to offer a good solution.

Dubai Gold and Commodities Exchange (DGCX)

In 2002 the Dubai government set up the Dubai Multi Commodities Centre (DMCC) to regulate and promote trade in various commodities, including gold. Three years later the DMCC established the Dubai Gold and Commodities Exchange (DGCX), the first dedicated commodities exchange in the Middle East.

The DGCX now offers four different gold contracts: Gold Futures, Shari’ah Gold, India Gold Quanto Futures, and the yuan-denominated Shanghai Gold Futures.

DGCX was the first foreign exchange to offer a yuan-dominated gold contract, underlining Dubai’s eagerness to be on the cutting edge of the international gold market. China is the world’s largest gold bullion market, despite only lifting a ban on private citizens investing in gold bullion in 2004.

Overall, trading on the DGCX gives you real options when it comes to identifying the most lucrative markets. It was named Exchange of the Year in 2017 and 2018 in the Global Investor Middle East and North Africa awards. It is based in the AU Gold Tower, within the Jumeirah Lakes Towers complex.

Finding wholesale and retail gold traders in Dubai

Traders in physical gold, rather than futures and other derivatives, may want to deal directly with wholesale or retail traders rather than through the DGCX.

The Dubai Gold and Jewellery Group (DGJG) is a trade body which represents the interests of around 600 members in a number of sectors, including gold bullion and jewellery production, and gold jewellery wholesale and retail.

The DGJG runs a number of promotional events for the retail sector, and also plays an important role in establishing consistent pricing for gold across Dubai.

It supplies its members with centrally-controlled price boards, which are displayed to the public and update the suggested gold retail price three times a day. DGJG also publishes these prices on-line for 18, 21, 22, and 24 carat gold and the Ten Tola bar.

Overall, applying for membership of DGJG is an ideal way to access the wholesale and retail gold markets in Dubai. Even if you don’t want to join, it makes sense to look for trading partners who are members, as the organisation’s regulations make it more likely you will be dealing with a reputable company.

Dubai has a thriving retail market, and an attractive corporate and personal tax regime, which is why a number of major gold jewellery retail groups, including Damas, Taiba and Malabar Gold, are headquartered there.

Retail outlets trading gold in Dubai

If your principle interest is the gold retail trade, then you are almost certainly going to be spending some time at the Gold Souk in Deira, which is one of the largest single gold retail centres in the world.

The souk is a popular tourist destination and has hundreds of shops offering a huge range of different products.

Another option for gold traders setting up business in Dubai is the Gold & Diamond Park, which was created in 2011 with retail spaces, manufacturing facilities and offices.

Importing and exporting gold

If you are trading gold in Dubai, you may want to take advantage of its well-established gold import and export processes. These have grown in scale and sophistication in line with the importance of the DGCX and the size of the local retail and wholesale markets.

Imports have exceeded exports every year since 2012, and the total volume imported and exported increased during that period from 1,637 tonnes to 1,855 tonnes.

The ease of importing and exporting gold from the city is helped by Dubai’s long-established role as the pre-eminent logistics centre for the entire Middle East.

Dubai International Airport was the fourth busiest in the world for freight in 2018, while the Jebel Ali port was the tenth busiest in the world and three times busier than Jedda, its nearest rival in the region.

If you do want to import or export gold to Dubai you need to register on-line with Dubai Customs. You will have to ensure you have the correct documentation, but there are no customs duties in Dubai.

Gold trading for miners

If you are trading gold which also requires refining, Dubai is well set up for the processing and handling of physical gold.

The DMCC has established the Dubai Good Delivery Standard for 1kg gold bars of .995 purity, and more than a dozen refining companies with DGD accreditation have offices in the free zone.

Two of those companies, Al Etihad and Emirates Gold, even operate DGD-accredited refineries within the free zone.

Emirates processes up to 200 tonnes of gold each year, and its Dubai refinery was the first in the Middle East to be receive DGD accreditation. Al Etihad is younger than Emirates but is expanding rapidly; it can process scraps of gold and silver, jewellery and even high-grade doré, as well as smelting large amounts of gold to produce bars and grains.

A third DGD-accredited company, International Precious Metals, has a refinery in Sharjah, north-east of Dubai. It produces around 300 tonnes of gold each year from mines, industrial scrap, jewellery and electronics.

Overall, Dubai offers excellent places to find reputable and reliable gold traders. You can make the most of a modern commodities exchange and access a range of traders in wholesale and retail. Plus, Dubai has the facilities to enable you to process gold, and to import or export your products.

Marcus Briggs is an entrepreneur and non-executive director of Icon Gold and vice-president of Citi Group. He specialises in identifying and developing opportunities in the gold bullion markets of the Middle East and Africa. Read more at his blog https://www.marcus-briggs.com/

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