Dubai's Gold and Commodities Exchange reported a record number of contracts last month, valued at more than US$9.2 bn.
Dubai exchange handles gold contracts record
Dubai's Gold and Commodities Exchange (DGCX) reported a record number of contracts last month, on the back of a 36 per cent increase in volume in the year to date. The region's first derivatives and commodities exchange reported a total volume of almost 137,000 contracts last month, or an equivalent value of more than US$9.2 billion (Dh33.7bn). "You can't put your finger on exactly what caused volumes to soar," said Ian McDonald, the executive director of gold at the Dubai Multi Commodities Centre (DMCC), noting the consistent growth in volume in the past three months. "We're doing things right for promoting DGCX, more banks are supporting us on the exchange and overall we are very positive about future growth."
Last month's record volume was indicative of an increase in crude oil contracts on the DGCX, which effectively hedged risks in a volatile market environment, industry insiders said. Crude oil represented 27 per cent of the total volume traded last month, yielding more than 36,000 contracts at a value of $5bn. In May, the DGCX announced two new crude oil contracts. The listings - for NYMEX West Texas Intermediate, the benchmark crude for the US, and ICE Brent crude, the standard used in Europe and much of the rest of the world - allow regional funds to invest in oil futures without taking money out of the region.
"The trend is moving upwards here," said Mr McDonald. "We've got many applications of people wanting to trade on the futures exchange, they are increasingly becoming more comfortable with it." In the latest monthly oil market report released by Opec, this year's global oil demand is forecast at a lower than expected increase of 1.1 million barrels per day (bpd), down from an increase of 1.17 million bpd projected earlier.
The total global oil consumption was revised to 86.88 million bpd from the previous estimate of 86.95 million bpd. Experts say that the massive scale of industrialisation and development in the Middle East and Asia is expected to fuel higher commodities prices as the demand for oil, as well as food, continues to grow. Meanwhile, gold prices fell slightly as easing oil prices reduced the metal's appeal as a hedge against inflation. Gold rose to $936 an ounce in Asian markets yesterday, up from $929.50 late on Tuesday, the first day of second quarter trading.
The precious metal peaked at $945.80 on Tuesday, its strongest level since April 18. @Email:email@example.com