Dubai: The Dubai Gold and Commodities Exchange (DGCX) said it plans to start trading in Yuan-denominated gold futures, a move that could open up the world’s largest bullion market to foreigners.
Under the licence, DGCX would settle futures contracts at the Shanghai Gold Exchange’s afternoon benchmark price on the 15th of each month, or the next available trading day, the DGCX said.
The contract to be called as — DGCX Shanghai Gold Futures (DSGC) — opens up a vital trading link by providing investors across the globe access to the largest bullion market, which is connected to over 10 million institutional customers, 8.3 million individual customers and 55 certified gold vaults.
DGCX’s bullion product suite currently includes a spot gold contract, Futures contracts in both gold and silver as well as Indian Quanto contracts in gold and silver.
The addition of the DSGC contract will greatly enhance DGCX’s precious metals offering and more specifically complement the Exchange’s gold products.
“Introducing innovative products such as the DSGC to the market highlights the valuable role that DGCX plays in developing the regional derivatives marketplace. And now with the launch of DSGC, we are further deepening our presence and commitment in the global bullion market. We are confident that DSGC will attract more traders worldwide to participate on the DGCX platform,” Gaurang Desai, chief executive officer at DGCX.
Baby step:
Meng-Chen She, DGCX’s director of business development and sales, said he would be happy to catch between 1 per cent and 10 per cent of Shanghai Gold Exchange’s trades.
“That could be very good in terms of volume for this region,” She said. “Primarily on the Shanghai Gold Futures now it’s a baby step. None is available outside of China. We are taking a baby step to make sure we enhance whatever is required to get this up and running. If they have 300,000 lots a day, and we get 1 per cent, that’s 3,000,” he said.
(With inputs from Andrew Staples, chief business reporter)
