The Dubai Multi Commodities Centre (DMCC), the Dubai Gold and Commodities Exchange (DGCX) signed a Memorandum of Understanding (MoU) with RAKBANK today, to explore the opportunity for joint development of precious metals products

In particular, one product that is under immediate consideration is a Retail Spot Gold contract that will be specifically targeted to retail investors and traders. Of course all products will be submitted to the relevant regulatory authorities for approval prior to launch.

The Retail Spot Gold contract will have a smaller denomination size in comparison to the existing DGCX Spot Gold contract which facilitates the physical delivery of 1 kg gold bars on a safe and regulated exchange platform. Launched in 2016, the Spot Gold contract has attracted several institutional participants and gold players from overseas as well as from the region due to the availability of a transparent and locally relevant price discovery mechanism. The Retail Spot Gold contract, however, will cast a wider net in terms of target investor audience and is expected to appeal more to retailers and smaller, more risk-averse investors and traders based in the region.

The Partnership

Gaurang Desai, CEO of the DGCX, explained how exciting this new partnership will be, “We are delighted to announce this strategic partnership with RAKBANK. Product innovation is at the core of our business strategy as an Exchange. We are constantly exploring new products in line with the needs of an ever-changing and growing customer base with the objective of catering to both institutional and retail participants. We strongly believe that by working together with RAKBANK, we can leverage each other’s strengths to create synergies and develop a safe and efficient platform for retail gold investment and trade in Dubai, ultimately contributing to the development of the region’s bullion market.”

The Digital Offering to Appeal to Consumers

Peter England, RAKBANK CEO, said: “We recognize the strong appeal of owning gold across the UAE with many having an unshakeable belief in the great security and safe haven store of value that physical gold brings. RAKBANK’s tie up with the DMCC and DGCX will ensure that customers, large and small, from across the region can acquire gold, at competitive prices, with a click of a button through an integrated Digital Banking platform. By providing customers this opportunity, we will help them to diversify their currency and asset holdings in a simple and cost effective manner, and enable them to manage risks in a secure, eligible and well regulated environment.

Since its inception in 2005, DGCX has been supporting the hedging needs of gold traders based in Dubai through the Gold futures contract. DGCX’s product portfolio covers a diverse range of energy, precious metals, base metals and currencies.