DGCX to list Shanghai gold futures

The Dubai Gold and Commodities Exchange (DGCX) will list a contract known as the “DGCX Shanghai Gold Futures Contract” after obtaining a license from the Shanghai Gold Exchange (SGE) to do so, the DGCX said on Saturday, October 29.

This will be the first yuan-denominated gold future product to be offered outside of China and will use the Shanghai Gold Benchmark as its pricing mechanism, the DGCX said.

SGE’s chairman, Jiao Jinpu, had said last week at an industry conference earlier in October that both exchanges are expected to sign an agreement in this aspect.

“The aim of the listing is to create further economic development and cooperation between China and Dubai through the precious metals trade. The gold futures product will offer global participants access to China and with that a deeper pool of liquidity as well as an enhanced gold pricing mechanism,” the DGCX said.

“We are a gateway to the Middle East, Africa and Europe where a significant portion of gold traders, miners, jewellers and financiers reside. This contract will have far-reaching appeal to those wanting access to a product with deeper pools of liquidity and a pricing mechanism that is fair and transparent,” Gautam Sashittal, CEO of Dubai Multi Commodities Centre and the board director of DGCX, said.

The DGCX also announced on the same day that the Agricultural Bank of China (ABC) DIFC Branch will be the first market maker for the Shanghai Gold Futures contract.

ABC is China’s third largest lender by assets and is one of the first participants in the precious metal business in China and is known to hold leading positions all the time, the DGCX said.

As part of the agreement, the ABC DIFC Branch will provide bid and offer prices with a minimum spread and maximum size, and maintain margins and collaterals.

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