The volume of gold futures traded on the Dubai Gold and Commodities Exchange (DGCX) shot up 154 per cent in January from the previous month, partly due to global equity market uncertainties, the bourse said on Wednesday.
DGCX, the Middle East's first commodities bourse, traded 86,140 gold futures contracts worth $2.47 (Dh9.1bn) in January, up from 33,877 contracts the previous month, it said in a statement to Reuters.
"The rise in trading volumes is reflective of the recent rally in some commodities, and also the growing interest for DGCX," Chief Executive Malcolm Wall Morris said in a press release.
"Record transactions were also propelled, to an extent, by a fresh inflow of funds into commodities as participants looked for alternative investment options amid uncertain equity markets."
Total value of all contracts - commodities and currencies - traded on DGCX in January stood at just over $4.31 billion, up 130 per cent from the same period last year, DGCX said.
Gold has dropped more than 3 per cent since hitting a record high of $936.50 an ounce in early February, driven by profit-taking and a recovery in stock markets. Spot gold was trading at around $900 an ounce in Europe on Wednesday.
A surge in oil prices boosted gold's appeal as a hedge against inflation.
Gold often moves in the opposite direction to the dollar as a weaker US currency makes the dollar-denominated metal cheaper for holders of other currencies.
Dubai launched the region's first gold futures exchange in 2005 as the economies of Gulf Arab nations boomed on windfall oil income.
Total open interest for gold as of January 31 stood at 4,139 contracts valued at $123.25 million, up from 584 contracts on December 31, the bourse said.
Dubai is a long-established market for gold bullion as well as wholesale and retail jewellery. Trade has benefited from strong demand from the Arab world and proximity to India, the world's main gold market.
The average number of gold contracts traded per day stood at 4,102 in January, a rise of more than 100 percent from the previous month, the exchange said.
Total volume of gold futures contracts traded since its launch on November 22, 2005 stood at around 1.28 million contracts worth $27.83 billion, it said.
DGCX is seeking to become a major commodities centre in the region. It hopes to continue its growth in futures trading this year after almost doubling its activities in 2007, Wall Morris said last week.
The exchange plans to introduce four plastics futures contracts in 2008 to cater for the rapidly growing petrochemicals industry in the Gulf, which has half of the world's petrochemical projects. (Reuters)
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