Dubai: The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group, a conglomerate from the Kingdom of Saudi Arabia, have agreed to develop and launch the Middle East’s first-ever Sharia 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, the DGCX said in a statement.
This development is reflective of the growing potential of the Saudi Arabian and wider GCC regions Sharia compliant gold markets. 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. Sharia compliant gold investments are worth an estimated $2 trillion (Dh7.34 trillion) meaning the decision to launch this new contract is ideally timed.
“We are looking at this product to develop local markets and unlock the potential of Gold trading in the region. We continually look to work with partners that allow us to capitalise on these opportunities. We are delighted to collaborate with the Ayedh Dejem Group as we believe the new Spot Gold contract will encourage new and existing institutional participants to invest and trade in Sharia compliant products. As the largest derivatives bourse in the Middle East, we are confident of the product’s success and establishing more such partnerships and launching additional products in the future,” said Gaurang Desai, Chief Executive Officer of the DGCX in a statement.
