Dubai Gold and Commodities Exchange (DGCX) has announced the launch of new Physical Gold Futures and Spot Gold Contracts as it continues its strategic goal of becoming the de facto gold pricing standard in the region.
The launch of the two products provides traders and financial institutions the ability to use physical gold as collateral to access affordable sources of short-term lending, backed by the guarantee provided through the Exchange clearing house acting as central counterparty.
The products are designed such that they can be used together by traders, similar to a repurchase agreement (“Repo"), to get short-term liquidity from banks through the spot gold markets while opposite physical future trade is done at the same time for the trader to receive their gold back and the bank to get their funds. The products are available now for trading.
Ahmed Bin Sulayem, Chairman and CEO of DGCX, said: “Over the last year, gold has become a solid top tier asset class globally as banks have increasingly started to accept it as collateral from traders and institutions looking for liquidity in the markets. The UAE is a regional financial hub and commodities trading, especially gold, is a crucial asset driving volumes in the markets. By launching new physical gold futures and spot gold contracts, we are offering greater choice to participants that operate in the commodities market. The move, which offers tremendous potential for traders, brokers, banks and financial institutions, reflects our commitment to continuously facilitate access to high-quality products and services for our members.”
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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