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Dubai /Â WAM
The Dubai Gold and Commodities Exchange (DGCX), the Dubai Multi Commodities Centre (DMCC) and RAKBANK signed a Memorandum of Understanding (MoU) on Saturday for the development of bullion products.
One product that is in immediate consideration is a Retail Spot Gold contract that could be specifically targeted for retail investors and traders. All products will be submitted to the relevant regulatory authorities for approval prior to launch.
A potential Retail Spot Gold contract could have a smaller denomination size in comparison to the existing DGCX Spot Gold contract which requires physical delivery of one kilogram gold bars. Launched in 2016, the DGCX Spot Gold contract has attracted several institutional participants and gold players from overseas as well as from the region due to the availability of a transparent and locally relevant price discovery mechanism. The potential Retail Spot Gold contract would be fully backed by physical gold, and will be held in a electronic form with the capability of physical redemption. This will cast a wider net in terms of a target investor audience and is expected to appeal more to retailers and smaller, more risk-averse investors and traders based in the region who have been looking at gold products offered through a fully lisenced exchange, such as the DGCX.
Gaurang Desai, CEO of the DGCX, commented on this MoU: “We strongly believe that by working together with RAKBANK and DMCC, we can leverage each other’s strengths to create synergies and develop a safe and efficient platform for retail gold trade and investment in Dubai, ultimately contributing to the development of the region’s bullion market.”
Peter England, RAKBANK CEO, said: “We recognise the strong appeal of owning gold across the UAE with many people having a strong belief in the great security and safe haven store of value that physical gold brings. RAKBANK’s tie up with the DMCC and DGCX will enable the development of a platform that allows customers, large and small, from across the region to acquire gold, at competitive prices, with a click of a button through an integrated Digital Banking platform.”
Gautam Sashittal, CEO of DMCC, said: “Our partnership with RAKBANK marks an important milestone in our journey to create a fully integrated global bullion market in the UAE. This is the beginning of an exciting journey that will offer for the first time, retail bullion investment products on exchange. This, together with our listed existing futures and spot products create a truly unique and appealing portfolio to the international trading
and investor community, both wholesale and retail.”