In Dubai, the streets may as well be paved with gold, after all forty percent of the world’s Gold is traded through the jewel in the Gulf crown.

Saxo bank’s Head of Commodity Strategy, Ole Hansen, has just returned from the UAE and has been talking to investors in Dubai. Ole says that the extensive trading is “not enough to drive the price up”. The Emirate is due to open a new USD 60 Billion refinery later this year, building on its reputation as a global centre for gold trading with volumes traded expected to reach USD 75 Billion this year.       

Gold continues to trade within USD 1270 to USD1315 and is a notoriously tricky trade.Ole Hansen points to last week’s trading as an example of how gold can catch out even the large investors.  

“Gold traders continue to find the direction hard to determine and last week was another example of this. May 6 hedge funds had increased their net-long by 14.4 percent, the most since March 18 only to see the price suffer a 1.5 percent retracement the following day on hawkish comments from the Fed chair Janet Yellen.”