DGCX primed to lead new era of global precious metals trading

Established as the region’s first derivatives exchange, DGCX has spent the past twenty years developing its product range to include currencies, commodities and Sharia-compliant contracts. Today, through a convergence of market performance, bullish demand, an appetite for enhanced product delivery, regulatory endorsement at a Federal level, and a sturdy financial technology partner, DGCX is primed to enter a new era of trade, worthy of the global market-making community.

With gold prices breaking through the $4,000 per ounce threshold, the precious metal has confidently reasserted itself as a store of value at a time of geopolitical volatility. At the same time,the foundation of physical trade in the UAE has been irreversibly solidified by the UAE Central Bank’s expectation that all gold bullion traded by UAE regulated banks that is held in custody in the UAE, must be stored in DMCC-approved vaults. Combined with DMCC’s strategic partnerships, which are deploying advanced, AI-driven technologies to enhance efficiency and scalability, DGCX is now positioned to reach an unparalleled level of physical integrity and digital prowess, resulting in an exchange capable of deeper liquidity, efficiency, and broader market access.

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For decades, Dubai has meticulously cultivated an ecosystem where the gold trade flourished, and where DGCX has emerged as the Middle East’s most vital derivatives exchange. Yet, in a hyper-competitive global market, leadership is not inherited, but earned through relentless innovation. To sustain the exceptional growth witnessed by the exchange, exemplified by a 30 percent year-on-year increase in average daily volumes achieved in the first half of 2025, DMCC is focused on a strategic roadmap that better serves every participant, from institutional market makers to individual retail investors.

Deepening liquidity with local currency and global benchmarks

Participants demand a platform defined by speed, scale, and clarity, and while the strategic partnership to deploy an advanced system is elevating DGCX’s core infrastructure, the focus is pushing further to achieve truly superior liquidity and price discovery. To achieve this, DGCX is now positioned to introduce a dirham-denominated gold contract for kilogram bars of UAE Good Delivery and LBMA gold refineries, subject to the relevant approvals from the Central Bank of the UAE and the Securities and Commodities Authority. This proposed contract will be physically deliverable, with spot and monthly futures contracts extending out to 12 months, and will come with distinct advantages. Firstly, by mitigating geopolitical and $trading risk associated with foreign markets, and secondly, by allowing local participants to trade in the UAE’s national currency, reinforcing the benefits of a local, stable exchange. The introduction of dirham-denominated gold contracts also supports the UAE’s broader strategy to internationalise its financial markets, deepen UAE dirham liquidity, and strengthen the role of the UAE Dirham in regional commodity trade settlements.

Additionally, DGCX will also be primed to introduce a daily benchmark gold price, similar to those issued by the LBMA and Shanghai Gold Exchange (SGE). Underpinned by its vertically integrated physical and financial ecosystem, DGCX would provide the global market with a precise, regionally relevant price reference point, thereby improving the ability of market makers to hedge and price their exposure, tightening spreads and boosting overall trading volume. Through implementation, DGCX will find itself in a strong position to attract the necessary reputable market maker banks and liquidity providers from the global markets. DGCX would further ensure the benchmark mechanism adheres to IOSCO Benchmark Principles, providing transparency, governance, and auditability to enhance trust among international participants.

Operational excellence and global market synchronisation

In the world of physical precious metals, time translates directly into risk. The delays inherent in traditional settlement processes tie up capital and introduce unnecessary counterparty exposure. As a result, DGCX is committed to implementing same-day or real-time settlement, and will eventually include a full suite of T+0 gold and silver contracts, similar to those offered on the Borsa Istanbul. This step dramatically reduces counterparty risk and provides participants with immediate capital availability, fostering an environment of higher efficiency and lower costs. As in intrinsically essential part of the process, Dubai Commodities Clearing Corporation’s (DCCC) robust risk management framework, including real-time margining, default fund structure, and adherence to PFMI standards, will ensure the integrity and resilience of the new 24-hour trading environment.

To ensure true global connectivity, DGCX and the Dubai Commodities Clearing Corporation (DCCC) are also reviewing the possibility of extending their operating hours to align with the opening of the Hong Kong market and the close of the New York market. This round-the-clock availability positions DGCX as a unique differentiator versus markets like COMEX, providing continuous pricing and hedging opportunities across all time zones. This would include trading dirhams in a $dominant market, thereby providing the market with a place to hedge. Critically, all physically-settled contracts, including the new dirham-denominated futures, will be deliverable directly into the DMCC vaults,consolidating the entire physical and financial lifecycle.

Democratising gold: From vaults to wallets

A further opportunity to expand market participation lies in the retail sector, leveraging the unparalleled trust in DMCC’s custody system. As a first move, this could include DGCX launching fractionalised tokenised gold and silver using digital token technology. This innovation allows retail investors to buy tokens representing fractional units directly from the exchange in smaller quantities, such as grams, with each token fully backed by the physical underlying gold and silver deposited in the DMCC vaults. Achieved through a robust, fully automated system, functioning as an Exchange Central Securities Depository (CSD) structure, the platform would be designed to handle the necessary retail Know Your Customer (KYC) and settlement processes with the support of a custodian and/or a bank. This strategic move would both deepen the overall liquidity pool while offering retail investors an unparalleled level of security and tangible backing. This initiative would also be designed in alignment with SCA’s forthcoming Virtual Asset framework and global standards such as FATF’s Travel Rule, ensuring that tokenised instruments maintain the same transparency and investor protection as their physical counterparts.

These planned introductions, from the retail-focused fractionalised tokens to the institutional-grade benchmark and global operating hours are more than just product launches, but the frontier ofDGCX’s evolution. By providing the most transparent, innovative, and secure platform for global trade, while listening to, and accommodating stakeholder demand, DGCX stands to increase its sphere of influence to becoming a globally-sought after, apoliticalhub for commodities and derivatives, but in particular, precious metals.

The writer is executive chairman and chief executive of DMCC.

Ahmed Bin Sulayem

Contributor

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leadership@khaleejtimes.com

Ahmed Bin Sulayem is the Executive Chairman and Chief Executive Officer of DMCC and has driven its growth from a start-up of 28 member companies in 2003 to the world’s leading free zone in 2023 with 24,000+ member companies from 180 countries, employing over 80,000 people.

Tasked with enhancing commodity trade flows through Dubai, DMCC has introduced to the market a number of value-added products and services under Mr Bin Sulayem’s leadership. In 2023, DMCC has been named the ‘Global Free Zone of the Year’ by The Financial Times fDi Magazine, for a record ninth consecutive year.

Mr Bin Sulayem oversaw the exponential growth of the DMCC Free Zone master development in Jumeirah Lakes Towers (JLT), a 200-hectare business and residential community in Dubai of over 100,000 people living and working across 87 towers. Mr Bin Sulayem also oversees the development of DMCC’s latest real estate project; the much-anticipated Uptown Dubai district.