AP Photos: Dubai makes bid to be City of Gold, becoming center in global trade

DUBAI, United Arab Emirates – Dubai is sometimes called the "City of Gold" because of its stunning growth from a sleepy Gulf port to a world-famous business crossroads in the space of a single generation. Its nickname has a literal meaning for traders in the precious metal.

The city is building itself up as a center for the gold trade, between sources in Africa and consumers in the rising economies of China and India.

Dubai now has about a 29 percent market share of global gold trade with nearly 1,200 tons — worth about $41 billion — changing hands at the city's gold markets, according to the gold industry website bullionstreet.com.

That's up from around $6 billion worth traded in the emirate in 2003, said Malcolm Wall Morris, CEO of Dubai Multi Commodities Centre, set up by the emirate to oversee the trade. "There's no doubt the geographical location of Dubai has played an important factor," he said.

Dubai's tax-free status has made it one of the cheapest places to buy gold in the world. The emirate has set up gold refineries and vaults and jewelry-making facilities, importing gold — including scrap from India — and melting it down to produce gold bars. At the Dubai Gold and Commodities Exchange, traders and speculators buy and sell the metal on the futures market.

Gold prices remained relatively steady in 2012, close to $1,700 an ounce. Some traders predict prices could once again rise toward the record high of nearly $1,900 an ounce, as central governments and investors look to gold as a safe bet in the unsteady world economy.

The city has also become a retail center with 600 shops selling gold — half of them crammed into the gold souq, drawing tourists, traders and local residents.

Lola Oyekola, from Lagos, Nigeria, came to Dubai especially to buy gold.

"Because I know I will get what I want, unique ones," she said. "I can tell them what I want and they will make it for me."