A lot of the physical gold that moves around needs to be refined to reach the desired purity and size of the new buyers - either after the initial refining at the mine, transfer from central banks or as part of the general recycling of gold. The London Bullion Market Association (LBMA) accredited refining industry is highly concentrated in Switzerland with over 3,000 tonnes per year passing through the tiny European country. Johnson Matthey, Valcambi, Metalor, Argor Heraeus and PAMP are the Swiss gold refining behemoths - some of which even retail gold buyers would recognize.

The burgeoning Middle Eastern market for gold has seen Dubai emerge as a hub for precious metal trading, both to meet the (wealthy) local demand as well the Indian and Chinese demand for gold bullion and jewelry. Kaloti Precious Metals already operates a 450 tonne per year gold refinery in Dubai but now has concrete plans to significantly increase its local refining capacity as it also sets up as an accredited refinery on the "Good Delivery List" of LBMA.

With plans now in place for the Dubai Gold and Commodities Exchange to introduce a spot gold contract this June, Kaloti Precious Metals hopes to be a major player in the region and is looking to invest $60 million in the new gold and silver refining capacity. It wants to be refining 1,400 tonnes of gold and 600 tonnes of silver per year from this new facility. Kaloti is looking to meet the specific demand of Indian and Chinese gold buyers who prefer 1 kg (32 troy ounce) gold bars of 0.9995 fineness for the jewelry industry and individual gold investors. The Dubai Gold and Commodities exchange will add to its current futures contracts with spot trading of this 1 kg gold bar with delivery offered within two days of the trade being settled.

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