International News
Middle East conflict halts India-UAE diamond trade
Industry leaders warn of prolonged caution in markets, with potential shifts to alternative routes like Hong Kong under scrutiny.
Iran has launched over 1,300 drones and 229 missiles at the UAE since February 28, 2026, in retaliation for US and Israeli strikes that killed over 1,000 people, including Iran’s Supreme Leader Ali Khamenei. UAE air defenses intercepted most threats, but the attacks caused 3 deaths and 112 injuries, with debris damaging civilian areas.
Trade Dependencies
The UAE supplies more than two-thirds of India’s rough diamond imports, making it the dominant source for the country’s diamond processing industry. India, in turn, provides over 90% of the UAE’s polished diamond imports, underscoring the bilateral trade’s critical role in global diamond flows.
Logistics Breakdown
Nearly all flights between India and the UAE stand cancelled amid the conflict, except limited repatriation services, crippling air cargo routes. Daily diamond export parcels—typically 400 to 500 from India to UAE—have stopped entirely due to airspace closures and flight suspensions.
Industry Impact
Exports and imports from the Middle East have ground to a standstill, with no logistics available to move goods,
The Dubai Multi Commodities Centre (DMCC), hub of the Dubai Diamond Exchange, shifted to remote operations and declined further comment on disruptions.
Broader Implications
The Middle East accounts for nearly a quarter of India’s $30 billion annual gems and jewellery exports, amplifying the economic fallout for Mumbai’s diamond trade ecosystem. Industry leaders warn of prolonged caution in markets, with potential shifts to alternative routes like Hong Kong under scrutiny.
- Safe Heaven Dynamics – Gold and Silver prices are currently influenced by competing macro forces. On one side, escalating geopolitical tensions in the Middle East are sustaining demand for safe-haven assets. On the other hand, the strengthening U.S. dollar and rising Treasury yields are limiting the metal’s upside, as higher yields increase the opportunity cost of holding non-yielding assets like gold.
- Geopolitical Developments – Tensions in the Middle East continue to keep investors cautious. The United States and Israel have intensified airstrikes on Iran, with some observers describing them as among the most aggressive attacks of the conflict so far. These developments have dampened earlier expectations of a near-term ceasefire, despite U.S. President Donald Trump suggesting that the conflict could conclude soon.
- Central Bank Buying – Official sector demand remains supportive for gold prices. China’s central bank added gold to its reserves for the 16th consecutive month in February, increasing its total holdings to 74.2 million ounces, according to official data. Sustained central-bank accumulation continues to provide structural support to the gold market by reinforcing long-term demand for the metal.
Technical Triggers
- Gold continues to maintain a bullish bias, with prices expected to move towards $5250 (~ Rs.163,500) and $5300 (~ Rs.165,000) in the near term. Strong support is seen around the $5000 (~ Rs.158,500) level, which is likely to act as a key buying zone on any corrective dips.
- After achieving the target of $90, Silver also remains firmly supported and is continuing its upward momentum, with the next upside target seen around $95 (~ Rs.285,000). On the downside, strong support is placed near $80 (~ Rs.260,000), suggesting that any short-term corrections could attract fresh buying interest.
Support and Resistance
| Metal | Market | Support Level | Resistance Level |
|---|---|---|---|
| Gold | International | $5000 / oz | $5300 / oz |
| Gold | Domestic | ₹158,500 / 10 gm | ₹165,000 / 10 gm |
| Silver | International | $80 / oz | $95 / oz |
| Silver | Domestic | ₹260,000 / kg | ₹285,000 / kg |
Source: AUGMONT BULLION REPORT
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