Last Updated :
04 January 2010 at 14:00 IST
Gold trading to boom in Dubai in 2010
DUBAI (Commodity Online): Vietnam has shut down
Gold trading in the New Year thanks to illegal operations and excessive speculative activity in the bullion market. But gold trading is going to boom in Dubai—the city of gold—in 2010. The merger of two exchanges in Dubai--Nasdaq Dubai and Dubai Financial Market (DFM)—will help gold trading to glitter in the Emirate city state that was hit by credit problems in 2009.
Bullion analysts said that trading volumes of Dubai Gold Securities (DGS) on Nasdaq Dubai will considerably rise after the merger of the two exchanges take place in April this year.
Sajith Kumar PK, CEO of JRG Metals and Commodities, DMCC, said trading volumes in gold will boom after the merger. “We feel gold trading volumes will rise by 10 per cent to begin with on account of the recent merger of Nasdaq Dubai with DFM,” he pointed out.
"DGS will further gain the momentum this year as it will attract more buying interest from investors and fund houses in the Mena followed by the merger of Nasdaq Dubai. Because, the merger enable all the brokers, bankers and fund houses, who are attached to DFM, to trade in DGS,” he said.
Despite the strong investment demand, currency fluctuations may pose threat to gold securities, caution some analysts. The rise of the greenback will take the sheen off the yellow metal.
Trading in Dubai Gold Securities gathered pace in the three months ending 30 November 2009 with 53,190 shares traded during that period compared with a total of 27,691 shares in the first six months after its launch at the beginning of March 2009, representing an increase of 92%. Some 40,668 shares were traded in November alone with a total value of US$4.57 million.
A joint initiative of the World
Gold Council and the Dubai Multi Commodity Centre (DMCC), Dubai Gold Securities trades on NASDAQ Dubai and is the Middle East’s first gold Exchange Traded Commodity (ETC). Additionally, it has been approved as Shariah compliant by an internationally recognized board of Shariah scholars.
Dubai Gold Securities LLP is incorporated in the Dubai International Financial Centre and can offer up to 1 billion Dubai Gold Securities under the Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. Dubai Gold Securities were first admitted to trading on NASDAQ Dubai on 2 March 2009.
Dubai Gold Securities (DGS) represents the first Shariah compliant ETC to be listed in the MENA region. Traded on NASDAQ Dubai (symbol: GOLD), it is an initiative of the World Gold Council and Dubai Multi Commodities Centre (DMCC). DGS offers an efficient, cost-effective and secure way to access gold.
Every security is backed 100% by physical allocated gold bars, audited by external auditors and representatives of the DGS Shariah Supervisory Board. DGS is marketed by Dubai Commodity Asset Management (DCAM), a wholly owned subsidiary of DMCC. DCAM is licensed by the UAE Central Bank and develops commodity-linked investment products for distribution in the UAE.
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