Dubai Gold and Commodities Exchange Reaches Out to UAE Gold by alicejenny


									 Dubai Gold and Commodities Exchange Reaches Out to UAE Gold

        Exchange seeks to raise awareness of hedging tools that can help gold traders to
        manage price risk in the precious metal and boost profitability

Dubai, July 24, 2012: Effective hedging tools will be critical for gold traders to maintain business
profitability in the current economic climate, according to a senior official of the Dubai Gold and
Commodities Exchange (DGCX).

Samir Shah, Chief Business Officer of DGCX said: “Gold prices have had a phenomenal run over
the last two years, but the distinguishing feature of the gold market in this period has been the
extreme price volatility of the precious metal, which has consistently threatened profit

Shah believes that hedging against price risk is particularly vital in the current environment
where many potential developments could significantly increase price volatility, including the
Eurozone crisis, the slowing down of emerging markets like China, elections and political risk,
the possibility of the third phase of Quantitative Easing (QE3) and the US fiscal situation.

DGCX recently hosted a Gold Hedging Workshop for gold merchants, in association with the
Dubai Gold and Jewellery Group (DGJG), aimed at explaining the vital need for hedging in
today’s volatile economic environment and the tools the Exchange offers to help them protect
their profits. “The DGCX Gold Futures contract provides an exceptional tool for hedging price
risk exposure in today’s market, allowing participants to profit when the market moves in either
direction,” said Shah.

Biju Joy, General Manager of the Dubai Gold and Jewellery Group (DGJG) said: “The workshop
was an excellent opportunity for Dubai’s gold merchants to understand the various strategies
they can adopt to manage gold price risk using the DGCX’s platform. The Dubai Gold and
Jewellery Group is committed to work with institutions like DGCX to support the development of
the gold market in Dubai.”
Using DGCX Gold Futures, gold merchants can hedge against gold price volatility by locking in a
future selling price for gold, thus making sure they can offset potential losses from any
significant change in prices.

“DGCX has designed its Gold futures contract with the needs of the UAE’s gold merchant
community in mind. We also regularly consult with the Dubai Gold Advisory Group, an informal
industry body composed of gold market players that we created to understand changing market
needs. Based on feedback from the Group, we have initiated key contract changes to further
improve liquidity in the product. Irrespective of their size, DGCX provides every gold merchant
equitable pricing with narrow bid-ask spreads to support them in managing their risk at a low
transaction cost,” Shah added.

He further said: “Since the Exchange is regulated by the Securities and Commodities Association
(SCA) and provides a government-owned central clearing system, gold merchants can trade with
the confidence that that their trades will be settled. Hedging gold using DGCX Gold Futures, as
opposed to products of other international exchanges, also allows Gold merchants to ensure
that their capital does not leave the UAE and that they incur very low transferring costs.”

DGCX expects increased interest in Gold Futures trading on its platform and the Exchange is well
positioned to meet this increased demand. In June, DGCX Gold Futures volume increased 111%
compared to the same month last year on the back of heightened trading spurred by increased
price volatility. The volume rise is also a result of significant steps taken to enhance the DGCX
Gold Futures contract.

Since its establishment, DGCX has played a vital role in strengthening the UAE’s financial system
by providing hedging tools and mechanisms that allow market players to transfer and manage
risk within a well-regulated environment. DGCX Gold futures, one of the Exchange’s flagship
contracts, when launched in 2005, introduced a new pricing benchmark for gold in the UAE, the
One kilo bar gold futures contract (0.995 fineness).

Further Information:
About DGCX: Established in 2005, DGCX is the region’s first derivatives exchange and the only
one allowing participants to clear and settle transactions within the Gulf region. The Exchange
has played a pioneering role in developing the regional market for derivatives. DGCX is a Dubai
Multi Commodities Centre (Dubai Government) initiative in partnership with Financial
Technologies (India) Limited and Multi Commodity Exchange of India Limited (MCX). It is an
electronic commodity and currency derivatives exchange with 230 members from across the
globe, offering futures and options contracts covering the precious metals, energy and currency
sectors. For more information:

Further Information:
Madyan Jabr
Dubai Gold and Commodities Exchange (DGCX)
Tel: +971 (0)4 361 1614; Email:
Baiju Francis
Promoseven Weber Shandwick PR
Tel: +971 (0) 4 321 0007; e-mail:

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