Dubai, UAE — The Dubai Gold & Commodities Exchange (DGCX) Tuesday said it is waiving trading, clearing and delivery fees for its Shariah Compliant Spot Gold Contract as it expects the move to increase trading volumes.
In a statement, DGCX said after having received regulatory approval from the UAE Securities and Commodities Authority, it will waive the fee until 31 December 2023.
This fee waiver excludes the SCA fee of $0.03. DGCX is also seeking approval from SCA to waive fees for its Gold Futures contract and will update the market accordingly.
The DGSG contract is compliant with Shari’ah principles for gold ownership and is certified by prominent Shari’ah scholars. Each contract is backed by 1kg of allocated and segregated gold bars with a minimum purity of .995, meeting “UAE Good Delivery” specifications.
Delivery is made through DMCC Tradeflow, an online platform tailored to register possession and ownership of commodities stored in UAE-based facilities, ensuring smooth delivery of contracts.
Louis Hems, Commercial Director of DGCX, said, “Having seen significant growth in the DGCX Shari’ah Compliant Spot Gold Contract since its launch in 2018, we expect the waiving of fees to attract greater volumes and act as a catalyst for the contract over the long-term by bringing in new investors from across the region and around the world.”
“At the same time, the increasing demand for gold in the current economic environment, alongside the steady growth of the Islamic finance industry, is adding further support to volumes and liquidity,” he said.
Against a backdrop of global inflationary pressure and economic uncertainty, the demand for gold has remained robust as investors seek safe-haven assets. I
In the first half of 2023, the price of gold increased by 5.4 percent, closing at $1,912.25/oz at the end of the period. Excluding developed market stocks, gold has outperformed nearly all other major assets this year, demonstrating its role as a reliable store of value.