Dubai's government-owned commodities centre is looking to introduce gold exchange-traded funds (ETFs) to the Dubai Gold and Commodities Exchange (DGCX) by trading.
"The contracts that we are considering for DGCX are spot gold .... and we are also looking at and hopefully will have enough time to add the gold ETFs that are listed in Nasdaq Dubai," Ahmed bin Sulayem June, DGCX's chairman said on January.
DGCX, which is linked to the Dubai Multi Commodities Centre (DMCC), began trading gold futures contracts in 2005 and now hopes to offer gold spot and ETF trading, the head of the DMCC told Reuters in an interview on the sidelines of a precious metals conference.
"We will do that only when the market-makers are ready," he said. DMCC's Dubai Gold ETFs are currently traded on Nasdaq Dubai, owned by Dubai Financial Market, but DMCC plans to shift the ETFs to its DGCX platform because of low liquidity to date despite strong interest in gold trading products in other parts of the world.
Gold has risen more than 6 percent this year as investors look for safe havens in an uncertain economic environment. But it has stayed below a lifetime high of around $1,920 an ounce hit last September. Gold spot and ETF trading has not been offered on DGCX yet because the platform is not technically ready to handle it.
"What we lack is technology, fundamentally it is OK now but we need to make it very competitive," Sulayem said. DMCC is also considering copper contracts in the near future but no firm date has been set yet. "We are weighing our options on copper but we haven't decided yet," Sulayem said.
Long standing gold trading hub Dubai is also rapidly expanding its diamond trade with the value of traded diamonds jumping from $3 million 10 years ago, to around $35 billion in 2010. DMCC is looking to double volumes traded in the next year.
"There's been so much talk about gold but diamonds is what are raising eyebrows now because the fact that it continued to grow so much in the last three years is a big thing," Sulayem said. DMCC is not currently seeking any acquisition opportunities or to join the latest flurry of exchange mergers.