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21 February 2024

Dubai gold futures volume hits all-time high

By Agencies


The volume of gold futures traded on the Dubai Gold and Commodities Exchange (DGCX) rose 11.6 per cent in February to an all-time high as investors poured money into commodities, the bourse said on Monday.

DGCX, the Middle East's first commodities bourse, traded 96,100 gold futures contracts worth $2.9 billion in February, up from 86,140 contracts the previous month, it said in a statement to Reuters.

"Trading in February proved to be exceptional, exceeding all records, as the entire commodity spectrum attracted high interest," Chief Executive Malcolm Wall Morris said in a statement.

Total value of all contracts -- commodities and currencies -- traded on DGCX in February stood at just over $4.6 billion, up 123 per cent from the same period last year, and 6.7 per cent from the previous month, DGCX said.

Gold erased initial gains to finish lower on Friday as funds sold bullion for liquidity, capping a volatile week which saw gold make several runs toward $1,000 an ounce but meet heavy resistance each time.

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 February 29 stood at 3,894 contracts valued at $121.57 million, up from 4,139 contracts on January 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 4,576 in February, compared to 4,102 in the previous month, the exchange said.

Total volume of gold futures contracts traded since its launch on Nov. 22, 2005 stood at around 1.37 million contracts worth $30.7 billion, it said.

DGCX wants 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.

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)