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Why the Emirates are Making Their Own Gold Standard

In a bid to create a gold standard, the United Arab Emirates (UAE) is ready to launch a ‘Good Delivery Standard’ for its bullion trade in February 2022. However, the UAE's launch of its own gold standard raises questions as to why and why now.

In a world where investors are players and economies are playing fields, aiming for gold is always the goal. But with so many players on a global scale and regulatory bodies pushing for transparency on trading data, it begs a question as to what happens in such a scenario.

What Exactly Is a Gold Standard?

According to experts, a gold standard is a form of regulatory policy that provides guidelines to a country and its refineries, mints and mines on ethical practices and combatting illicit trading. For the UAE to create their gold standard would mean their government would create their own unique guidelines and requirements that are independent of the LBMA. In fact, the guidelines would be created to directly compete with the LBMA., UAE plans to ensure a gold standard would require listed refiners to monitor suppliers (for illicit gold purchases) and maintain transparency via external audits.

When The Emirates will Launch its Gold Standard?

The London Bullion Market Association is a gold organization that sets and maintains the norms on best practices for gold trading economies as part of its Global Precious Metals Code. In recent times, the LBMA has issued a strict warning to black-list nations that do not meet their regulations in the metal trade market.

While the UAE ensures and rejects claims of unethical practices, this newly established Good Delivery Standard, incorporated under the Gold Standard DMCC, would ensure tighter monitoring of gold refiners and help combat illicit gold in the UAE gold market.

But at the same time, the UAE Good Delivery Standard is also expected to solidify its position as a global gold trading hub. By creating a gold standard, the UAE will be more open to transparency which would assist the country in adapting to better international practices and regulations in the gold trading industry. The UAE is hoping to launch its own gold standard in February, 2022. 

Conclusion

The United Arab Emirates Gold Standard DMCC will continue to be a member of the London Bullion Market Association, to ensure gold from gold refiners are acceptable for trade in the market. Creating their good delivery standard in the metal trade will create a more competitive outlet for gold products from the UAE gold refineries.

But at the end of the day, the reason the UAE would launch its own gold standards would be to gain independence from LBMA global control.

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