Record gold contract sales spur on Dubai Gold & Commodities Exchange

Dubai Gold and Commodities Exchange (DGCX) has sold a record-breaking one million contracts.

Dubai Gold and Commodities Exchange (DGCX) has sold a record-breaking 1.02 million contracts in the first nine months of the year, breaking the million mark for the first time. The contracts, valued at US$52 billion (Dh191bn), boosted the DGCX's growth by 52 per cent compared with the same period last year. The DGCX, the region's first derivatives and commodities exchange, said the higher trading activity was led by currencies, precious metals and crude oil, adding that intensified volatility in the global financial and equity markets had led market participants to shift resources to areas such as commodities and currencies. "If you look at figures this year versus last year, we're on target to trade considerably more than last year," said Malcolm Wall Morris, the chief executive of the DGCX. The milestone was supported by a record performance in the third quarter, when 385,000 contracts - valued at $20.5bn - were traded. Mr Morris said commodity derivatives offered an opportunity to diversify and achieve a balanced portfolio in the current high-risk climate. "Derivatives markets allow you to hedge on the downside as well as the upside, so you can actually protect yourself when the markets fall as well as when they increase." Two new crude oil contracts launched in May also drove growth, DGCX officials said. The listings - for Nymex West Texas Intermediate, the benchmark crude for the US, and ICE Brent crude, the standard used in Europe and much of the rest of the world - allow regional funds to invest in oil futures without taking money out of the region. Oil prices fell for a fourth day yesterday to below $90, deepening last week's 12 per cent slump, the market's biggest loss in almost four years. However, Mr Morris said the current price volatility had not reflected negatively on Dubai's contracts trade. "Compare our volume in August to the volume on other exchanges and you will see it is a gateway for regional liquidity from everything that happened," he said. In currencies, the euro led the growth with 94,000 contracts in the year to date, up 240 per cent compared with the corresponding period last year. Gold futures rose by 37 per cent for the year to date, reaching 695,000 contracts, while the average daily volume for gold futures stood at 3,200 contracts last month, up 51 per cent year on year. Gold prices rose slightly to $841.20 in London yesterday morning after leading other precious metals on a tumble last week as the world awaited the US financial bailout. The precious metal had enjoyed its biggest one-day gain in almost three decades late last month as equity markets plunged in response to the global financial crisis. [e-mail]