The Dubai Gold and Commodities Exchange (DGCX) has announced the introduction of fresh physical gold futures and spot contracts in an effort to achieve its strategic goal of being the region’s primary source for gold price information.
With the introduction of the two new products, traders and participating financial institutions now have access to low-cost, short-term loan sources that are secured by the collateral offered by the exchange’s clearing house as a centralised third party.
When physical gold futures and spot contracts are traded simultaneously, the trader receives his gold and the bank receives his money, thanks to the architecture of these two contracts that allows traders to utilise them together as a buyback agreement to acquire short-term liquidity from banks. The fact that these two contracts are currently tradable on the exchange’s platform is noteworthy.
Ahmed bin Sulayem, CEO of the Dubai Gold and Commodities Exchange, commented on the introduction of the two new contracts, saying: “Gold’s position as a strong asset class has strengthened internationally over the past year, as banks increasingly began accepting it as collateral from traders and institutions seeking liquidity in the markets.
The UAE is a significant financial hub for the area, and commodities, particularly gold, are a significant asset that boost market trading activity. By introducing physical gold futures and spot contracts, we hope to give players more market options. This action, which has enormous potential for traders, brokers, banks, and financial institutions, underlines our dedication to improving our members’ access to high-quality goods and services.
The opening transaction of the two new decades
In addition, the Dubai Gold and Commodities Exchange announced the execution of the first agreement under these two new contracts between two institutions of the exchange’s members, namely Paloma Precious DMCC and one of the most significant banks in the UAE. As a result, these two institutions became the first to gain access to short-term liquidity through these two contracts. the twenty years.
The delivery of the physical gold bars exchanged under these contracts will be handled by Emirates Gold, a company that adheres to the Emirates Good Delivery standard.
Ibn Sulayem stated in a relevant context, “We are pleased with the success of the first transaction to be inked in the framework of our new products. Without a sure, this transaction exemplifies the nature of the practical and cutting-edge products we offer, which are available to all significant market players.
We anticipate reaching other agreements of this nature with other banks and financial organisations, in addition to continuing to offer traders in the markets liquidity-providing products.
The Dubai Gold and Commodities Exchange’s EOS trading platform presently allows traders to trade both of the new contracts. By buying and selling commodity and currency derivatives, traders can use this platform to control the risks associated with their operations, preserve the value of their trades, and expand their portfolios.
According to DMCC rules, the gold supplied under the spot gold contract must be at least 995 ppm pure and adhere to the “Emirates Good Delivery of Gold” standard along the chain of custody. The central counterparty for all transactions is the DGCX clearing house. This demonstrates the United Arab Emirates’ ongoing dedication to bringing the highest international gold standards to the area.
Following the signing of a Memorandum of Understanding between the Dubai Gold and Commodities Exchange and FinMet, a top provider of training, logistics, trading, and technology for precious metals, physical gold futures and spot contracts are now available. In order to inform market players, find more opportunities in the gold markets, and draw new banks and members who are seeking to diversify their trading to satisfy their business needs, the exchange will work with FinMet.
Dubai Gold and Commodities Exchange introduces fresh spot and futures contracts for gold-based commodities.
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