Going for gold: Hong Kong ousts Dubai as biggest hub for Russian bullion trade
- Hong Kong has imported 68 tons of Russian gold this year, four times as much as the whole of 2022
- The shift to Hong Kong has been driven by US sanctions on Russia’s top gold miners, as well as a crackdown by the UAE on illicit activities in its bullion market
Shut out of London following the invasion of Ukraine, Russian gold trading switched to Dubai. Now it’s shifting again, to the bullion hub of Hong Kong.
The city has long been a key conduit for bullion entering the Chinese mainland – the world’s biggest consumer market – but since April, Russian shipments surged. Hong Kong imported 68 tons of Russian gold this year, four times as much as the whole of 2022.
The shift to Hong Kong was driven by US sanctions on Russia’s top gold miners, as well as a crackdown by the United Arab Emirates on illicit activities in its bullion market, according to people familiar with the matter. The move east underlines the challenge faced by the West in curbing resource flows that fund the Kremlin’s war machine.
Before the invasion of Ukraine, almost all the gold exported from Russia – the world’s second-largest miner – was shipped to vaults in London, the centre of the global bullion trade. But the Kremlin’s attack made Russian gold taboo in the mainstream industry, even before a formal ban blocked imports to the G7 and European Union.
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When Russian gold was locked out of London, Dubai – a key transit hub for bullion being shipped to Middle East and Asian markets – was the initial beneficiary. The UAE maintained its neutral stance this year, refusing to take formal measures against Russian gold despite lobbying by the US and UK, people familiar with the discussions said.
Russia shipped 96.4 tons of bullion to the UAE in 2022, making it the country’s largest supplier. That was more than five times the volume exported through Hong Kong.