FX.co ★ Hong Kong turns into Russia’s biggest gold importer amid regulatory crackdowns

Recent studies have revealed a significant shift in the global gold trade, with Russia increasing its gold exports to Hong Kong fourfold this year, reaching a notable 68 tons. This development marks a considerable change in the dynamics of the international gold market. Previously, the United Arab Emirates (UAE) held the status of the leading importer of this precious metal. However, the UAE has recently refocused its efforts on combating illegal gold trading. Notably, in March 2022, the global Financial Action Task Force (FATF) intensified its scrutiny of gold movements in the UAE. This targeted oversight led to a slowdown in gold trade in Dubai, accompanied by heightened state surveillance over gold transactions. Such measures made it difficult to pay Russian exporters. In response to these challenges, some gold importers in Dubai shifted their supply chains towards Hong Kong. This move, however, is stimulated by stringent Western sanctions aimed at Russian gold exports. Besides Hong Kong and the UAE, Turkey has emerged as a major importer of Russian gold. The introduction of Western sanctions against Russian gold has led to a significant realignment of trade operations from Europe to Asia. This redirection of gold flows from the UAE to Hong Kong is largely due to the implementation of regulatory measures against any illegal gold trade.