Saturday, August 19, 2017

Dubai ready to go head on against London and New York with new Sharia compliant gold spot price and contract

Last year China introduced the first alternative gold price when they launched it at the Shanghai Gold Exchange.  And over the more than 12 months its spot gold market has been in operation, its price is often much higher than the spot prices determined in London at the LBMA, or in New York at the Comex.

Now on Aug. 19 Dubai is ready to become the third gold spot price market as they set to introduce their own Sharia compliant contract which must officially be backed by physical gold.

The Dubai Gold and Commodities Exchange (DGCX) will develop and launch the region’s first Shariah-compliant spot gold contract as the precious metal is getting a bigger role on Islamic finance. 
DGCX is partnering with Saudi conglomerate Ayedh Dejem Group to make the $7.5 trillion gold market more investable for the world’s 1.6 billion Muslims, who are limited by the type of gold instruments they are allowed to investments in due to Shariah restrictions. 
“We are looking at this product to develop local markets and unlock the potential of gold trading in the region. We are delighted to collaborate with the Ayedh Dejem Group as we believe the new spot gold contract will encourage new and existing institutional participants to invest and trade in Shariah-compliant products,” said Gaurang Desai, the chief executive DGCX. 
“Bringing Shariah-compliant products to a wider audience will continue to garner interest from the local populous as well as other global entities that are looking for a route into the newest and fastest growing sector of the mainstream financial markets.” 
Shariah-compliant gold investments are now estimated to be worth $2 trillion, and the decision to launch the spot gold contract should further attract the interest of regional Islamic financial institutions and banks, DGCX said. – Arab News

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