DGCX opens Shanghai Gold Futures

Commodities traders in North America who want to expand their reach might consider an exchange on the other side of the world. The Dubai Gold and Commodities Exchange (DGCX) offers an expanding array of contracts designed for global appeal.

Now, DGCX is entering as a global player in precious metals with its Shanghai Gold Futures contract (DSGC). The contract gives traders everywhere direct access to the world’s largest bullion market – those who are keen to access the Chinese bullion market no longer need to go to China.

DGCX is the first and only foreign exchange to introduce a Chinese gold-backed derivative product. It entered into an agreement with the Shanghai Gold Exchange (SGE) to introduce the yuan-denominated DSGC contract, which was launched this spring. Until then, the Shanghai exchange’s deep liquidity pools had been difficult to access by foreign participants.

“Our Shanghai Gold and Indian Gold offerings further expand the breadth and depth of our flagship Gold contract,” says Gaurang Desai, CEO of DGCX. “And we’ve added calendar spreads to allow traders to take a longer term view, while giving producers and refiners the ability to hedge their respective cycles.”

DGCX’s differing Gold contracts offer hedging opportunities and allow suppliers in Africa and other gold producing regions to efficiently supply gold to private and sovereign purchasers in South Asia and the Far East through Dubai. Its potential advantages include its very central location in a Dubai tax-free zone. Traders can execute tax-free in a time zone midway between the Far East and Europe.

“The exchange is open for the most liquid part of the global trading day,” says Meng-Chan Shu, who is Director of Business Development for DGCX. “We’re in the epicenter of the world’s most liquid time zones.”

As such, the DGCX’s near 17 open hours encompass markets across Asia, the Middle East, Europe and the Americas. Its time zone (GMT+4) means the exchange opens at noon in Tokyo, is having lunch when markets open in London, and afternoon tea when they open in New York.

DGCX is now positioned as the only exchange in the world to offer a range of gold products that are linked to all the major global trading hubs including China, India, Dubai and the US. While it devises new products of global interest, the exchange continues to serve as a strong regional market for members and participants.

“Its strategic location with extended hours covering Asian through to American time zones, allows us to access regional and international liquidity pools,” says Paresh Kotecha, of Richcomm Global Services, which has traded on the DGCX for 10 years. “We’re building positions around an expanding line of products, giving access to institutional players and banks that want to hedge going out twelve months and beyond.”

DGCX recently listed G6 currency and Gold calendar spreads and now offers forty-six products including Gold, FX, Equities, Indian Rupee, and other precious metals. Its Brent, WTI and mini WTI (one-tenth) contracts allow tax-free position and arbitrage trading too.

“We’re bringing more traders worldwide to the DGCX platform,” says Shu. “We’re young, dynamic and we are growing fast” he adds.

Alan Mammoser writes about cities, environment, energy, infrastructure and planning. He writes the weblog, www.warmearth.us