Turkey pitches for Dubai gold trade
- Exporter: Istanbul ‘could fill the void’
- Dubai trade disrupted by Iran war
- Analyst points to high costs in Turkey
Istanbul could challenge Dubai as a centre for the global gold trade, a senior representative of Turkey’s jewellery industry has said – although other market observers believe the emirate’s glittering crown is safe for now.
The international gold sector is under pressure with trade in Dubai disrupted by the war between the US-Israel and Iran, according to Ayhan Güner, vice president of Turkey’s Jewellery Exporters Association.
“Today Dubai is the centre of the global gold trade,” he told local media on March 9. “However, both the war and instability will have global repercussions for our sector. Istanbul, with both its gold exchange and diamond exchange, could fill the void.”
Dubai traders are reportedly selling gold at a discount because of falling local demand and uncertainty over how long the war will continue. The precious metal is selling for up to $30 an ounce below the standard rate on the London market, according to Reuters.
Global gold prices have also eased since the outbreak of the conflict on February 28, dipping by about 2 percent.
Turkey’s gold and jewellery industry is also likely to be affected by the trade disruptions, since more than 42 percent of its $8 billion exports last year went to countries in and around the Gulf.
However, gold and money markets analyst İslam Memiş dismisses the suggestion the gold trade could move to Istanbul.
Turkey has much to do to put its own house in order before becoming a precious metals trading centre to rival or supplant Dubai, he told AGBI. This includes easing restrictions on gold imports introduced by the government to try to curb the trade deficit.
“Due to the quota on imports and high workforce costs, gold is much more expensive in Turkey to start with,” Memiş said.
“Then let’s ask why this market is based in Dubai as well – no taxes and no registry, not like in Turkey.”
Although the war was disrupting Dubai’s gold and jewellery trade, Memiş said Gulf pain would not result in Turkish gain.
“It is true that money escapes risks, but it does not mean it comes and falls in your lap – not while the gold situation in Turkey is like this.”
The Dubai Gold and Commodities Exchange was contacted for comment.
Further reading:
- Turkish contractor wins deal to rebuild historic Iraqi city
- International airlines avoid Middle East over Iran war
- How Egypt’s economy is exposed by the Iran war
You May Also Like
Tesla secures SpaceX stake through xAI merger ahead of IPO
Trump’s plan to defy the Supreme Court has survived over 3,600 legal challenges
