Levy difference ‘diverts gold trade to Dubai’

Updated 14 February 2014
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Levy difference ‘diverts gold trade to Dubai’

Disparity in customs duties on imported gold works has diverted gold trade from Saudi Arabia to Dubai despite the existence of a unified GCC customs duties system, a key jewel expert in Jeddah told local media.
In Saudi Arabia, gold traders have to pay 5 percent of the value of gold works imported into the Kingdom whereas traders in Dubai are paying 0.5 percent of that value on the ground that Dubai is a wholesale and re-export market, former head of gold and jewelry committee at Jeddah Chamber of Commerce and Industry (JCCI) Jamil Farsi said.
Earlier, wholesale gold traders from Sudan, Egypt, Libya, Morocco and other countries used to purchase gold from Saudi markets. Naturally, gold traders abstained from buying gold from the Saudi market and opted to Dubai due to increased excise duties in Saudi markets, he said.
This unfair competition has gravely hit gold trade in the Kingdom and shifted gold trade center from Saudi Arabia to Dubai, he noted.
The jewel expert counted a number of reasons, which contributed to the shift of gold trade to Dubai, including ease of visa procedures and non-existence of intermediaries in Dubai where (Indian) traders used to showcase products in Dubai markets, which brought positive results for the business there.
He said India had earlier invited Saudi traders to purchase gold from the country instead of Dubai, which could have minimized fees of brokers and automatically led to price reductions.
India has weighed Saudi Arabia as the most important and biggest gold market globally, he said.
For his part, former member of gold and jewelry committee at JCCI Mohamed Azouz said certain obstacles, including visa formalities, existing in Saudi markets had either compelled traders to go to Dubai or fully stopped business in the market.
If the concerned authorities did not find appropriate solutions to difficulties facing the Kingdom's gold industry, the industry would be vulnerable to “disappear,” Azouz warned.


Oil prices jump as US crude stocks fall, Middle East worries add support

Updated 26 June 2019
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Oil prices jump as US crude stocks fall, Middle East worries add support

  • Analysts said the gains were mainly driven by American Petroleum Institute data showing a fall in US crude inventories
  • Data come as traders watched for any signs that tensions between the US and Iran could escalate into military conflict
SYDNEY: Oil prices rose more than 1 percent on Wednesday to their highest in nearly a month as industry data showed US crude stockpiles fell more than expected, underpinning a market already buoyed by worries over a potential US-Iran conflict.
Front-month Brent crude futures, international benchmark for oil, were up 1.3 percent at $65.91 by 0341 GMT. They earlier touched their highest since May 31 at $66 a barrel.
US West Texas Intermediate (WTI) crude futures were at $58.98 per barrel, up 1.8 percent from their last settlement. WTI earlier hit its strongest level since May 30 at $59.03 a barrel.
Analysts said the gains were mainly driven by American Petroleum Institute (API) data showing a fall in US crude inventories.
US crude stockpiles fell by 7.5 million barrels in the week ended June 21 to 474.5 million, compared with analyst expectations for a decline of 2.5 million barrels, the data showed. Crude stocks at US delivery hub Cushing, Oklahoma, fell by 1.3 million barrels.
“Oil prices went ballistic after the API report,” said Stephen Innes, a managing partner at Vanguard Markets.
“Oil prices have been squeezing higher on escalating tensions in the Middle East. But with late-day draws showing up in the API report, this is a strong signal for the energy market,” Innes said.
The data came as traders watched for any signs that tensions between the United States and Iran could escalate into military conflict.
US President Donald Trump threatened on Tuesday to obliterate parts of Iran if it attacked “anything American,” in a new war of words with Iran. Tehran has condemned a fresh round of US sanctions as “mentally retarded.”
Bilateral tensions between the two have spiked anew after Iran shot down a US drone last week in the Gulf. Relations have been tense since Washington blamed attacks on oil tankers just outside the Gulf in May and June on Iran, while Tehran has repeatedly said it had no role in the incidents.
Conflict between Washington and Tehran has stoked fears that shipments passing through the Strait of Hormuz — the world’s busiest oil supply route — could be disrupted.
Seeking to calm a nervous market, the head of national oil company Saudi Aramco said on Tuesday the company can meet the oil needs of customers using its spare capacity.