Gold Trading in Dubai Hits New Record

Gold Trading in Dubai Hits New Record

Gold Trading in Dubai Hits New Record

Volumes on the Dubai Gold and Commodities Exchange (DGCX) crossed over 11Mn contracts this year, growing 49% from last year. The overall volumes in July 2016 touched 1,674,268 contracts, registering a massive year-on-year(Y-O-Y) increase of 47%, driven largely by elevated trade volumes across precious metals, currencies, equities and hydrocarbon segments. The Exchange also recorded the highest monthly overall Average Open Interest (OI) of 257,249 contracts in July 2016.

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July 26, 2016, a key date in the history of DGCX, saw the Exchange hitting its highest ever daily volume with 176,645 contracts valued at USD 3.6 Bn, and recording the highest daily OI of 381,456 contracts valued at USD 6.5 Bn.

DGCX’s precious metals segment, particularly the Gold products, continued with its high volume growth owing to uncertainty and volatile markets post Brexit. The Exchange’s flagship Gold futures contract traded an average of 2,155 contracts per day in July, registering a substantial Y-O-Y increase of 61%. While Average Daily Volumes (ADV) on Gold Quanto touched 1,389 contracts in July 2016, recording an impressive Y-O-Y growth of 170%. DGCX’s gold portfolio locked in a strong performance this year, trading 456,913 contracts, up 99% from the same period last year.

In DGCX’s currency segment, Indian Rupee contracts witnessed brisk trading, recording the highest monthly Average OI of 144,184 contracts in July 2016. Monthly Average Daily Volume (ADV) on the Indian Rupee Quanto contract registered a Y-O-Y growth of 351%. Indian Rupee options registered a Year-to-Date (YTD) increase of 150%. ADV on Rupee futures grew by 27% , trading 45,842 contracts in July 2016. British Pound futures continued to see heightened trading activity in July driven by the Brexit uncertainty, with ADV growing 279% from the same period last year.

Gaurang Desai, CEO of the Dubai Gold and Commodities Exchange said: “We are pleased to set a number of records this month specially on the Open interest front, which reflect the sustainable confidence on the DGCX platform. Open Interest is an indication of the resident interest and liquidity, and also demonstrates the robustness of our trading platform. We offer a diversified range of products which enable markets participants to effectively manage their risk and exposure across different asset classes, especially with the global uncertainty more prevalent over Brexit.”

The Hydrocarbon asset class also reported a favorable growth in July on the back of sliding oil prices, registering an increase of 185% from the same period last year.

New product performance

The newly launched Dubai India Crude Oil (DICO) contract traded 1,823 contracts since its listing on July 1 2016. The product designed to bring together the DGCX WTI prices and the flagship USDINR contract, has been witnessing significant interest from market participants. The contract which was launched as part of the Exchange’s efforts to strategically strengthen its energy vertical, allows participants to trade in a Crude Oil futures benchmark referencing the Indian Rupee, whilst trading in US Dollars. With WTI pricing accounting for over 25% of global supply, the DICO futures contract provides accessibility to the Indian energy markets for a wider range of participants.

About DGCX: Established in 2005, DGCX is the region’s leading derivatives exchange and the only one allowing participants to clear and settle transactions within the Gulf region. The Exchange has played a pioneering role in developing the regional market for derivatives.
DGCX is a subsidiary of Dubai Multi Commodities Centre (DMCC), a strategic initiative of the Government of Dubai, with a mandate to enhance commodity trade flows through the Emirate by providing the appropriate physical, market, financial infrastructure and services required. It is an electronic commodity and currency derivatives exchange with 267 members from across the globe, offering futures and options contracts covering the precious metals, energy and currency sectors. For more information: www.dgcx.ae

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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