Dubai's DGCX Reports Positive ‘Knock-On Effect’ From Shanghai Gold Futures
The Dubai Gold and Commodities Exchange (DGCX) said that the recently listed DGCX Shanghai Gold Futures Contract (DSGC) had an impressive “knock-on effect” on other gold products in April, this according to a recently published statement.
“The DSGC, which uniquely allows access to the Chinese Gold market, traded a total of 2,946 contracts since its listing on March 10th. DGCX’s Spot Gold contract saw impressive six-fold growth year-on-year, while also recording a 74% increase in deliveries through the DMCC Tradeflow platform,” DGCX said on Monday.
Geopolitical instability in 2016 and 2017 was a partial diver for the boost, according to the exchange. “There has also been a growing optimism for gold, especially on the back of Brexit and French election uncertainty,” the DGCX added.
The deal to list the Shanghai Gold Futures Contract was made in October 2016 between the DGCX and the Shanghai Gold Exchange (SGE). The agreement allowed for “the first-ever usage of the Shanghai Gold Benchmark Price in international markets,” said CEO of the DGCX, Gaurang Desai.
The listing has also given Dubai an advantage over Singapore, Xinhua quoted CEO of Dubai-based commodities trading firm Richcomm Global Services, Paresh Kotecha, as saying. “[In Singapore] Chinese gold futures are traded over the counter, but not as a standardized futures contract,” Kotecha noted.
Dubai has increased its trade deals with Beijing in the past two years, with China replacing India as Dubai’s biggest trading partner, according to the media report.