UAE Shifts to Russia as Primary Gold Supplier Amidst Western Restrictions

In 2022, the United Arab Emirates purchased 96.4 tons of gold from Russia, making Russia its top gold supplier. With these purchase figures, Russia has overtaken Zimbabwe, Ghana, and Mali as top gold importers amid Moscow sanctions relating to its invasion of Ukraine. When numerous Western countries began imposing restrictions on Russia because of its invasion in February 2022, the United Arab Emirates hopped on this opportunity to purchase a portion of the nation’s available gold supply.

Last year, the UAE imported more gold from Russia than any other nation, with a total of 96.4 tons of gold purchases on record. This data comes from the United Nations Comtrade.

The amount of gold that the UAE purchased from Russia accounts for about one-third to one-half of Russia’s total mining output, depending on the year. Between the years of 1992 and 2022, Russia averaged an annual gold production rate of roughly 187.5 tons. Russia’s largest gold operations include the Olimpiada Mine, Natalka Mine, Blagodatnoye Mine, Kupol and Dvoinoye Mine, and Verninskoye Mine.

The UAE’s gold purchases from Russia in 2022 were 15 times that of the year prior.

The United Arab Emirates didn’t just purchase gold from Russia last year, though. Its second-largest gold supplier was Mali, which provided 95.7 tons of gold to the UAE in 2022. The UAE purchased gold from numerous other countries in Africa as well.

In 2021, Mali was the UAE’s top gold supplier. During the year, Mali provided the nation with nearly 16% of its total gold, valued at $7.3 billion, according to Observatory of Economic Complexity, an international trade data site.

The next largest UAE gold provider in 2021 was Zimbabwe, accounting for 7.62% of the nation’s gold. After that, ranked Sudan, Niger, Uganda, and Ghana, accounting for 6.13%, 5.82%, 4.32%, and 3.7% of the nation’s gold purchases, respectively. Clearly, Russia didn’t even make it on the list of top gold suppliers in 2021, then managed to trump the competition just one year later.

Since 2021, UAE gold import levels from Russia have surged dramatically. Between February 24, 2022, and March 3, 2023, the United Arab Emirates imported 75.7 tons of gold from Russia, showing an extreme spike since the start of the Russia-Ukraine war.

In 2021, the Gulf state imported just 1.3 tons of gold from Russia. This data comes from Russian customs and shipment records.

The UAE is not the only nation taking advantage of the Western restrictions imposed on Russia. Numerous nations have been buying gold in bulk from Russia, including China and Turkey.

China and Turkey rang in as the second-largest gold importers from Russia, each purchasing around 20 tons from the nation. Between the United Arab Emirates, China, and Turkey, the forces combined accounted for 99.8% of the gold exports in Russia during the period, according to customs data.

Before Russia’s invasion of Ukraine in February 2022, Russia shipped most of its gold to London. During 2021, the United Kingdom purchased around $15.4 billion worth of gold from Russia, according to figures from Statista.

The United Arab Emirates values gold for numerous reasons, though most importantly, it plays a key role in the nation’s trading resources. Dubai has a robust gold trading market that doesn’t impose value-added tax on gold, making it one of the largest gold trading hubs in the world. The UAE offers competitive pricing, high volumes, and excellent demand for the gold market.

The United Arab Emirates is also renowned for its top-tier gold purity. Many investors flock to Dubai for their gold purchases to enjoy ideal gold quality at competitive prices.

In 2021, the United Arab Emirates imported $46 billion worth of gold. By the end of the year, the nation ranked fourth for top gold importers in the world.

At the same time, the United Arab Emirates also came in second place for the largest precious metal imports, totaling a value of $32.8 billion. The nation purchased most of its precious metals from Switzerland, with its Swiss purchases accounting for 22.5% of the total. After Switzerland came India supplying 21.5%, Hong Kong providing 20%, and Saudi Arabia fulfilling 9.04%.

After shifting to Russia as its major gold source, the UAE has maintained its status as a leading gold hub. Looking ahead at 2023 gold-buying trends in Dubai, demand appears strong as the nation heads into its festival-buying season.

“UAE gold demand from Friday (September 29) to Sunday represented the biggest sales this year, just behind the period when the price was Dh203 a gram in February,” Shamlal Ahamed, the Managing Director of International Operations at Malabar Gold & Diamonds, explained.

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