Even as bullion futures contracts jump at the Dubai Exchange, moves are afoot to hold the Global Gem and Jewellery Fair for the first time in Dubai, in tandem with Indias export council.

Silver Futures Contracts Soar 354% in January at Dubai Exchange

The Dubai Gold and Commodities Exchange (DGCX) has set its sights on growing its role as a global financial hub and has recorded a thumping start to 2014, with a total of 1,043,200 futures contracts traded in January, an increase of 36% over December 2013.

Among precious metals, DGCX Gold futures recorded 38,531 contracts, a month on month increase of 5%. Silver futures also experienced strong volume growth of 354% from January last year, and an increase of 35% from December 2013.

Gary Anderson, Chief Executive Officer, DGCX noted that a promising start to the year had been made. Annual volumes in 2013 grew 43% from 2012 to reach 13,759,255 futures contracts, the Exchange’s highest ever.

Traded over a period of 253 trading days, 2013 volumes represent a value of $448.25 billion. Average daily volume also registered a significant jump to reach another all time high of 54,384 futures contracts.

Though currencies were the primary driver of the growth in 2013, with a jump in Indian rupee futures, up 36% from the previous month, the growth in silver futures, up 354% from January last year and up 35% from December 2013, has astounded market participants.

Even in 2012, the precious metal segment was a key driver of overall annual volume growth, with the segment registering a 30% volume increase from 2011. This was primarily led by trading in gold futures, which rose 42% from 2011.

The Dubai financial market general index has also gained since the start of the year to 19.46% amidst ample interest from foreign traders.

Ahmed Bin Sulayem, the CEO of the commodities free zone, Dubai Multi Commodities Center, told newswire agencies that around 20% of the worlds gold trade flows through Dubai at present. He added that the uptrend would continue despite last years steep fall in the price of gold.

The crash in gold prices has only heralded buying time for consumers. At the recently concluded Dubai Shopping Festival too, gold was the most sold commodity, with buyers streaming in from China and Russia.

Russians are spending good amounts of money in the UAE, and especially during the Festival. According to the credit card company Visa, Russians spent an estimated US$82.1 million during the Festival last year, more than any other nationality, compared with $61.3 million spent in 2012, a 34% increase. The purchases were mostly gold and jewellery pieces.

Igor Egorov, chairman of the Russian Business Council said the real figure would be probably higher than credit card statistics, since most Russians tend to pay cash.

Apart from slashed prices at more than 6,000 retail outlets and 70 malls across the UAE, there was plenty more on offer. Bullion retailer Pure Gold Jewellers reported a better than expected 25% year on year increase in gold jewellery sales during the Festival. The company also reported an 8% surge in diamond jewellery sales.

Karim Merchant, CEO of Pure Gold Jewellers said the jump in sales was mainly due to the increase in the number of tourists from the Indian subcontinent.

Given the heightened sales, the Global Gem and Jewellery Fair is to be held for the first time in Dubai from March 20-22, 2014. The event is jointly organised by DMCC and the Gem and Jewellery Export Promotion Council in India.

The UAE alone accounts for 40% of India’s gem and jewellery exports, said Pankaj Parekh, vice chairman of the Council. He added that the event presented an opportunity to consolidate India’s exemplary gem and jewellery manufacturing expertise with Dubai’s status as the premier gold, diamond and precious stones jewellery hub.

With over 130 exhibitors participating from India and the GCC, the Global  Fair aims to provide an ideal platform for international buyers and sellers as they seek to trade top quality gems and couture jewellery during the three day event.

The UAE is a global hub for the bullion and jewellery trade, with gold jewellery consumption estimated at $2.5 billion, making it one the top five in the world besides China, India, the United States and Russia.

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