Passenger Planes Full of Gold are Grounded in Dubai Sending Prices Higher

Gold prices edged higher today as passenger planes full of the precious metal were left grounded by Iranian attacks on Dubai, one of the world’s biggest logistics hubs for the precious metal.

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Golden Transit Point

Spot gold was up 1% today. It is up 10% in the last month as investors flock to it as a safe haven for their money during the U.S., Israel and Iran conflict.

Iran’s main counterattack response to bombing of its own cities is to send its missiles and drones to Israel and the neighboring Gulf states including the United Arab Emirates.

The suspension of air traffic in Dubai – apart from a limited number of repatriation flights – as well as the shock of the attacks is a major headache for world trade, including gold.

According to a Financial Times article, Dubai is a key logistics hub for gold handling around 20% of the globe’s turnover of the shiny metal. It is a major transit point for gold flows from Europe to Asia, as well as supplies from the resource-rich African continent.

These routes have effectively been blocked during the conflict which erupted over the weekend with U.S. and Israeli strikes on Tehran with the goal of regime change in the Islamic Republic. Less supply leads to higher prices.

Passenger Cargo

‘The availability of gold became a problem after flights were suspended,’ said John Reid, senior market strategist at the World Gold Council.

Perhaps to the ignorance of millions of people who fly every day, gold is transported by passenger planes in batches of up to 5 tons. That means that on just one flight you could be sitting above a cargo hold full of gold at an estimated value of over $800 million.

Currently, airlines are giving priority to perishable cargo, leaving precious metals in warehouses.

Silver has also been impacted with large accumulations of the metal understood to be sitting at Heathrow Airport.

The gold price has had other key drivers this year including economic tensions around President Trump’s tariffs, lower interest rates and central banks scooping up the precious metal.

A number of analysts believe the price will soar to above $6,000 an ounce by the end of this year.

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