In a nondescript office tower in Dubai's Gold Souk district, a trader who has been in the business for three decades describes how the geography of his trade has transformed in just four years. Before 2022, the majority of his business flowed along well-established routes: gold mined in Africa and Central Asia was refined in Switzerland or the UAE, certified to London Bullion Market Association standards, and shipped to buyers in Europe, North America, and Asia. The supply chain was linear, transparent, and overwhelmingly denominated in US dollars. Today, he describes a splintered landscape — parallel supply chains, alternative refining standards, new corridors bypassing traditional hubs, and a growing share of trade settling in currencies other than the dollar. The geography of gold, which had been remarkably stable for decades, is being redrawn by geopolitics.
Part I: The old map
To understand what is changing, it helps to understand what the gold supply chain looked like before the current upheaval. For most of the post-war period, and particularly since the liberalization of gold trading in the 1970s, the physical gold market was organized around a hub-and-spoke system centered on London and Zurich.
London served as the price discovery hub. The London gold fix — conducted twice daily by a panel of bullion banks — set the benchmark price for most global gold transactions. Physical gold was stored in Bank of England vaults and in the vaults of LBMA member banks across the City. Zurich, home to the world's largest gold refineries, processed raw gold from mines around the world into good delivery bars — 400-ounce ingots meeting strict LBMA specifications for purity, weight, and provenance — that could then be shipped to buyers globally.
Dubai played a secondary role as a regional hub, particularly for gold destined for the Indian subcontinent and the Middle East. Singapore and Hong Kong served similar functions for East and Southeast Asian markets. But the London-Zurich axis was the central nervous system of the global gold market, and virtually all institutional-grade gold flowed through it at some point in the value chain.
The Traditional Gold Supply Chain
Mines (Africa, Australia, Americas, Russia) → Refiners (Switzerland: Valcambi, PAMP, Argor-Heraeus; South Africa: Rand Refinery) → LBMA-accredited good delivery bars → London/Zurich vaults → Distribution to global buyers. All priced and settled in USD.
Part II: The sanctions catalyst
The freezing of Russia's foreign exchange reserves in February 2022, followed by the ban on imports of Russian-refined gold by the London, Tokyo, and New York precious metals exchanges, was the single most disruptive event in the modern gold market's structure. Russia had been one of the world's largest gold producers, mining approximately 330 tonnes annually. Its refineries — primarily the Krastsvetmet and Novosibirsk facilities — produced LBMA-accredited good delivery bars that flowed freely through the global supply chain.
Overnight, those bars became untradeable in Western markets. But the gold itself did not disappear. Russian mine production continued at full capacity, and the physical metal needed to go somewhere. The answer was a rapid redirection of flows toward non-Western markets — primarily China, India, Turkey, and the UAE — through a set of corridors that has since hardened into a parallel infrastructure.
The Dubai corridor
Dubai's role in the post-sanctions gold market has grown enormously. The UAE did not join Western sanctions against Russia, and its refineries — which had already been handling gold from African artisanal and small-scale mining operations — were well-positioned to absorb redirected Russian flows. Russian gold, in some cases still bearing LBMA-accredited hallmarks but excluded from London trading, found its way to Dubai refineries where it was re-refined, re-hallmarked, and effectively laundered of its sanctioned origin before being sold onwards to buyers in Asia, the Middle East, and Africa.
The scale of this operation is difficult to quantify precisely, but trade data provides strong circumstantial evidence. UAE gold imports from Russia surged from virtually zero in early 2022 to hundreds of tonnes annually, while UAE gold exports to India, China, and Turkey increased correspondingly. Dubai's DMCC (Dubai Multi Commodities Center) reported record gold trade volumes in 2023 and 2024, driven in significant part by this redirected flow.
The Shanghai corridor
China's role in the restructured gold market extends beyond its position as the world's largest consumer and second-largest producer. The Shanghai Gold Exchange, which China developed as an alternative to the London market, has become the primary price discovery and delivery mechanism for gold in Asia. Physical delivery through the SGE has averaged over 1,800 tonnes annually in recent years — a volume that dwarfs delivery through London's LBMA system.
More significantly, the SGE offers an alternative accreditation standard to the LBMA's good delivery list. Refineries that have been expelled from or never achieved LBMA accreditation — including Russian refineries and a growing number of Chinese, Emirati, and African operations — can trade through the SGE system. This creates a parallel quality standard that, while not directly interchangeable with LBMA bars, serves the needs of a large and growing share of global gold buyers who do not require Western institutional accreditation.
Part III: The African supply chain shift
Africa's role in the restructured gold market deserves particular attention. The continent produces approximately 900 tonnes of gold annually — roughly a quarter of global mine output — with significant production in South Africa, Ghana, Mali, Burkina Faso, Guinea, Tanzania, and the Democratic Republic of Congo. Historically, the vast majority of African gold was refined in South Africa (by Rand Refinery) or shipped to Switzerland for processing by Valcambi, PAMP, or Argor-Heraeus.
Two forces are reshaping African gold flows. The first is the resource nationalism wave sweeping West Africa, which is creating incentives for domestic or regional refining rather than export of raw doré to Swiss refineries. The second is the growing presence of Russian and Chinese actors in African mining, who naturally direct output through their own networks rather than the London-Zurich axis.
The result is an emerging African gold supply chain that bypasses the traditional Western infrastructure. Raw gold from artisanal and small-scale mines — estimated at 500-800 tonnes annually across Africa, much of it unregistered — increasingly flows to Dubai or directly to buyers in India and China, where demand for physical metal is price-sensitive but less concerned with LBMA provenance standards. This informal supply chain operates in parallel with the formal mining sector, and its growth has been facilitated by the sanctions-driven restructuring of global gold flows.
The New Gold Map
Western corridor: Mines → Swiss refiners → LBMA bars → London vaults → Western institutions. Eastern corridor: Mines → Dubai/Chinese refiners → SGE-accredited bars → Shanghai/Mumbai → Central banks & Asian consumers. African informal: ASM production → Dubai souk traders → Re-refined bars → India/China/Turkey. Russian redirect: Russian mines → Domestic refiners → Dubai re-processing → Non-Western buyers.
Part IV: Implications for investors
The bifurcation of the gold market into parallel supply chains has several implications for investors.
First, it reinforces the structural tightness in the LBMA-accredited market. As a growing share of global gold production flows through alternative channels, the supply of metal meeting Western institutional standards is effectively constrained even though total global production remains stable. This can manifest as widening premiums for LBMA good delivery bars over the Shanghai benchmark, and as episodic tightness in London vault holdings — both of which have been observed intermittently since 2022.
Second, the emergence of parallel price discovery mechanisms — the LBMA Gold Price in London, the SGE benchmark in Shanghai, and growing Dubai-based pricing for regional trade — creates opportunities for arbitrage but also for price divergence during stress events. In a severe geopolitical crisis, it is conceivable that the London and Shanghai gold prices could decouple meaningfully, with different premiums reflecting different local supply-demand dynamics and different assessments of counterparty risk.
Third, and most fundamentally, the restructuring of gold trade routes is a physical manifestation of the broader geopolitical realignment that is driving gold's structural bull market. The same forces that are pushing central banks to buy gold — sanctions risk, de-dollarization, the weaponization of financial infrastructure — are also reshaping the channels through which gold is mined, refined, traded, and stored. Investors who understand these structural changes are better positioned to assess the durability of the current gold rally and to identify the risks that could eventually challenge it.
The old gold map — linear, London-centric, dollar-denominated — served the market well for half a century. The new map is more complex, more contested, and more reflective of the multipolar world that is emerging around it. For gold investors, that complexity is not a reason for confusion but for confidence: the forces reshaping the gold market's plumbing are the same forces that are driving its price higher, and they show no signs of reversing.
