Dubai’s Gold and Commodities Exchange (DGCX) and the Dubai Multi Commodities Centre (DMCC) have signed an agreement with RAKBank to develop gold bullion products for investors.
The organisations are developing a number of products but have said the one under immediate consideration is a Retail Spot Gold contract that people can buy as gold investment.
The idea is to offer smaller-denomination contracts than the DGCX Spot Gold contract launched last year, which is more geared to professional traders as it requires the physical delivery of one kilogram gold bars. The new service will be offered to retail investors and smaller, more risk-averse, traders. The parties said the proposed Retail Spot Gold contract would be still be backed by physical gold and although it would be held in electronic form there would be a capability of physical redemption.
Peter England, the chief executive of RAKBank, said: “We recognise the strong appeal of owning gold across the UAE with many people having a strong belief in the great security and safe haven store of value that physical gold brings. RAKBank’s tie-up with the DMCC and DGCX will enable the development of a platform that allows customers, large and small, from across the region to acquire gold, at competitive prices, with a click of a button.”
The price of gold has fluctuated over the past two years from a low of US$1,061.10 per ounce early last year to $1,366.33 in July last year. On Friday, prices rose by 0.2 per cent to $1,254.53.
Naeem Aslam, the chief markets analyst with London-based ThinkMarkets, said that gold prices had climbed as a result of greater political instability caused by the US president Donald Trump’s missile strikes on a Syrian airfield.
“We maintain our target that the precious metal could easily touch the level of $1300 in the coming weeks,” he said.
mfahy@thenational.ae
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