DGCX to launch Shariah-compliant spot gold contract

dubai - It is expected to attract the interest of regional Islamic financial institutions and banks

The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group, a conglomerate from Saudi Arabia, have agreed to develop and launch the Middle East's first-ever Shariah-compliant spot gold contract to be traded on an international exchange.

The partnership enables both entities to increase their presence in the Saudi Arabian and wider GCC Islamic finance market, and attract the interest of regional Islamic financial institutions and banks.

According to the World Gold Council, Saudi Arabia's gold demand stood between 60 and 85 tonnes. This is the highest in the Middle East and ranked sixth in the world; representing almost 30 per cent of demand across the region. Shariah-compliant gold investments are worth an estimated $2 trillion.

Gaurang Desai, CEO of the DGCX, said: "We are looking at this product to develop local markets and unlock the potential of gold trading in the region. We believe the new spot gold contract will encourage new and existing institutional participants to invest and trade in Shariah-compliant products."

Ayedh Dejem Group is known as one of the largest oil transportation and storage platforms in the region, working closely with GCC producers. The group also manages numerous gold centres and is a key investor in the field of fixed assets, including infrastructure and real estate, while developing new projects in Dubai and the wider UAE.

- business@khaleejtimes.com