(MENAFN- Khaleej Times)

The Dubai Gold and Commodities Exchange (DGCX) is set to introduce a dirham-denominated gold contract as part of efforts to boost the UAE's role in global precious metals trading, Ahmed Bin Sulayem, Executive Chairman and CEO of the Dubai Multi Commodities Centre (DMCC), said in a column for Khaleej Times.

Bin Sulayem, who also chairs DGCX, said the proposed contract, subject to approvals from the Central Bank of the UAE and the Securities and Commodities Authority, will be physically deliverable and available in both spot and monthly futures formats extending up to 12 months.

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“The new contract will mitigate geopolitical and USD-trading risk associated with foreign markets while allowing local participants to trade in the UAE's national currency,” he said.

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“It also supports the UAE's broader strategy to internationalise its financial markets, deepen dirham liquidity, and strengthen the role of the dirham in regional commodity trade settlements.”

DGCX is also planning a daily benchmark gold contract, similar to those issued by the London Bullion Market Association (LBMA) and the Shanghai Gold Exchange.

Bin Sulayem said the benchmark, backed by DGCX's vertically integrated ecosystem, would give traders a regionally relevant price reference and tighter spreads.

He noted that the benchmark would comply with standards set by the International Organization of Securities Commissions (IOSCO) to ensure transparency and prevent market manipulation. This, he said, would help build market confidence and attract global investors to DGCX.

To broaden its global reach, the exchange and its clearing arm, the Dubai Commodities Clearing Corporation, are also reviewing plans to extend trading hours, opening with Hong Kong and closing with New York, while moving to same-day settlement for physical contracts to make trading faster and more efficient.

“This round-the-clock trading window would make DGCX a unique differentiator versus markets like COMEX, providing continuous pricing and hedging opportunities across time zones,” Bin Sulayem wrote.

He said all physically settled contracts, including the new dirham-denominated futures, will be deliverable directly into DMCC vaults, combining both physical and financial settlement under one roof.

Founded in 2005, DGCX has grown into the Middle East's largest derivatives exchange, recording a 30 per cent rise in average daily volumes in the first half of 2025.

With gold prices now above $4,000 per ounce and new rules requiring all gold bullion in custody to be stored in DMCC-approved vaults, Bin Sulayem said DGCX is“primed to enter a new era of global trade” driven by AI-powered technology, stronger liquidity, and greater efficiency.

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