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Boom Year for Dubai Gold and Commodities Exchange
11/13/2013 12:30 pm EST
Over the past year, there has been a boom in gold futures in Dubai, writes John Everington, of The National, who also explains how this boom has become an essential component of the expansion plan in Dubai.
Volumes on the Dubai Gold and Commodities Exchange (DGCX) have surged 56% year over year on the back of strong growth in precious metal contract trades.
On Sunday, November 10, the exchange reported traded volumes, for the ten months to the end of last month, reached 12.17 million contracts, up from 7.78 million in the same period last year.
Gold futures trading surged 60% during October, with 45,928 contracts being traded. Silver futures rose 88% to hit a new monthly high of 2,882 contracts traded.
Precious metals, and gold in particular, are central to the exchange's expansion plans, with a spot gold contract to be launched imminently, according to Gary Anderson, DGCX's chief executive.
“With almost a quarter of all physical gold traded globally passing through Dubai, we believe there is a very strong market for a spot gold contract,” he said.
“Such a contract will not only help merchants enhance price risk management and profitability, it will also enhance liquidity in the gold market by removing the need for offshore credit and collateral for gold trading.”
The exchange also reported a 63% growth in currency trading in the year to the end of October, with Indian rupee futures increasing in popularity—up 50% in year-to-date trading. They recorded 10.44 million contracts for the year to the end of October.
DGCX Indian rupee futures accounted for 33.69% of the total rupees future market in October, making it the largest exchange offering offshore trading in the contract.
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