Dubai commodities exchange Q1 volume falls a third

LOST SHINE: DGCX saw 212,485 contracts traded in the first quarter, down 33% from the same period last year. (Getty Images - for illustrative purposes only)

Volume on the Dubai Gold and Commodities Exchange (DGCX) fell a third on the year as the deteriorating global economy sapped appetite for trade, it said on Sunday.

The DGCX saw 212,485 contracts traded in the first quarter, down 33 percent from the same period last year, the exchange said in a statement.

But volume has slowly picked up after a tough fourth quarter, when tight credit hit liquidity across markets worldwide.

"Despite weakness in global market conditions, the month-on-month volume growth and strong first quarter performance shows that DGCX is moving in the right direction", said Malcolm Wall Morris, chief executive officer of DGCX.

"Much of the volume increase has been led by the growing interest and demand for currency futures. Volatility in currencies has encouraged market participants to hedge their exchange-rate risk on DGCX in order to better manage their exposure," he said.

In March, 101,215 contracts traded, up 39 percent from February.

Volume growth was driven by increased currency futures trade, especially in Euro-Dollar and Sterling-Dollar contracts, the DGCX said.

But gold futures suffered a hit in March as traders shied away from the precious metal because prices are quite volatile, said Pradeep Unni, analyst at Richcomm Global Services.

"Traders were very uncertain about gold which was about $1000 per ounce in February and now is $891, that's why trading volumes were down," he said.

The DGCX currently has eight listed futures including gold, silver, currencies, steel and Brent crude oil. (Reuters)

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