Dubai's DGCX enjoys record trading as value of gold and rupee contracts surge

The exchange traded more than 23 million contracts in 2019, up from 22.26 million a year earlier

Gold hit a six-year high in early trading on Monday, while palladium hit an all-time high on the back of rising tensions in the Middle East and a tightening of supply. Pawel Dwulit / The National

The Dubai Gold and Commodities Exchange said that it broke annual records for traded volumes last year as investors sought to capitalise on volatility in gold and currency markets.

The exchange traded 23.06 million contracts in 2019 - up from 22.26 million a year earlier as contracts worth more than $866 billion (Dh3.18 trillion) were cleared. Average open interest contracts, the total number of contracts outstanding at the end of a trading day, were up 14 per cent at 324,803, DGCX said in a statement on Sunday.  August marked the busiest month for the exchange, with 3.2 million contracts traded, beating its previous record of 2.3 million contracts set just a month earlier. Its busiest month prior to that was in May 2018, when 2.16 million contracts were traded, it added.

“DGCX’s second consecutive year of record volumes and all-time high average open interest is testament to our continued efforts to widen investor participation and enhance liquidity in our contracts. To eclipse our achievements from 2018 is an outstanding feat, and demonstrates the effectiveness of our growth strategy to appeal to a broader range of market users seeking protection and various hedging mechanisms to mitigate their risk,” said the exchange's chief executive, Les Male.

The exchange's best-performing product was its INR Quanto Futures contract, a derivative based on the Indian rupee's rate against the US dollar. Some 7.7 million contracts were traded on the currency pair, up 109 per cent year-on-year as as the rupee fluctuated in value, from 68.63 rupees to the dollar in March to a high of 72.46 in September, before closing the year at 71.36.

The exchange's Gold Futures contract also performed strongly, with average daily volumes growing at 225.5 per cent in June as prices spiked on market uncertainty.

After gold prices rose 18 per cent last year, the exchange announced the launch of new products such as a mini-gold futures contract that is still awaiting approval from regulators. It is set to be used in partnership with RAKBank, allowing savers to buy and trade gold in smaller denomination units of 10 gram.

“This year we aim to continue our growth trajectory and build on the strong platform we established in 2019. We have a considerable pipeline of products ready to launch subject to regulatory approval, including mini-gold futures and FX Rolling contracts. We are confident that 2020 will be a momentous year,” Mr Male said.