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- The Hong Kong bullion market has seen Russian gold imports quadruple to 68 tons this year, Bloomberg reported.
- It has outpaced Dubai as the biggest hub of Russian gold trading, after the UAE cracked down on illicit trading.
- Western sanctions on Russian gold shifted the trade to Asia and the Middle East and away from Europe.
Hong Kong has dethroned Dubai as the biggest hub for Russian gold trading, importing 68 tons of gold so far this year, or four times as much as the whole of 2022.
While the Chinese city has long been active in the global gold trade, imports of Russian bullion have surged since April, Bloomberg reported.
That's in part because of a regulatory crackdown on illicit gold trading in the UAE, which saw greater scrutiny from the global money laundering watchdog, the Financial Action Task Force, in March 2022.
Since the Task Force added the UAE to its watch-list, gold trading in Dubai has slowed. Bank transfers and cash payments have been subjected to increasing government oversight, which has made it difficult to pay Russian exporters, Bloomberg reported.
Some gold traders in Dubai rerouted shipments to Hong Kong, according data cited from ImportGenius tracking Russian customs figures.
Also driving the bullion binge in the Asian market is a heavy set of Western sanctions on Russian gold that has locked it out of the London bullion market — historically, the center of the gold trade.
Those sanctions were imposed last year after Russia's invasion of Ukraine, providing a boost for the Dubai gold market as the UAE did not take a punitive stance against Russia.
Before the tide shifted this year, the UAE imported 96.4 tons of bullion last year, five times the amount Russia sent to Hong Kong in 2022.
In addition to Hong Kong and the UAE, Turkey also emerged earlier this year as a major destination of Russian gold.