While gold traditionally serves as a safe-haven asset during crises, current market conditions suggest that liquidity and portability are becoming equally important considerations for investors navigating uncertain geopolitical environments
Rising geopolitical tensions in the Middle East are prompting many Indian expatriates in Dubai to liquidate gold assets as a precautionary financial measure.
Jewellery traders in Dubai’s famous Gold Souk report a noticeable increase in customers selling gold bars and jewellery for cash, often accepting discounts below prevailing market prices. Many of the sellers are members of the Indian diaspora seeking to build a financial safety cushion amid uncertainty in the region.
Retailers estimate that more than 100 sellers are visiting gold stores daily since tensions escalated following the Israel-Iran conflict. Some jewellers say they are purchasing as much as one kilogram of gold per day from expatriates looking to convert physical assets into liquid funds.
Industry analysts say such behaviour is common during periods of geopolitical instability, when investors prefer easily transferable assets such as cash or foreign currency.
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Unlike money transfers that can be executed digitally, transporting gold across borders is restricted by customs rules and baggage limits
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For travellers returning to India, duty-free allowances typically permit up to 40 grams for women and 20 grams for men, with higher quantities attracting import duties
Gold prices in the UAE have also shown volatility amid global market reactions to the conflict. Traders report that stores are buying gold at discounts of around four to five percent from market rates.
Financial advisers note that some expatriates are converting gold into cash and transferring funds abroad as a hedge against currency fluctuations and regional instability.
The weakening of the Indian rupee against the UAE dirham—pegged to the US dollar—has also encouraged some NRIs to remit funds to India while exchange rates remain favourable.
Jewellers managing large inventories are reportedly hedging risks by selling gold futures to offset potential losses from sudden price swings.
