Gold imports and trading have surged in Hong Kong recently as merchants and investors from the Middle East and Russia move their holdings from Dubai to the city amid the regional war, according to the Hong Kong Gold Exchange (HKGX).

Since early April, some gold merchants from these regions have been selling physical gold in Hong Kong at a discount of 15 to 20 per cent to the market price, said Haywood Cheung Tak-hay, chairman of HKGX.

“The discounted sales were a result of the US-Israel war with Iran, which has led these merchants to shift their gold stocks, which they originally planned to sell in Dubai, to Hong Kong,” Cheung said in an interview with the South China Morning Post.

These merchants offered discounts to Hong Kong buyers as they wanted to make a quick sale, he said.

Some of this gold was first sold in Dubai and then re-exported to Hong Kong, but now the traders were selling the precious metal directly here, without going through intermediaries, and were therefore able to offer a lower price, Cheung added, without giving details as the official import data would only be available later.

Dubai, the largest city in the United Arab Emirates, is a major gold-trading hub.