The Dubai Gold and Commodities Exchange (DGCX), the sole international derivatives market for commodities and currencies in the Middle East in relation to regulatory standards, launched the Shanghai Gold Futures Contract, the first of its kind outside China, in Dubai on Sunday.

Following the signing of a deal between the DGCX and the Shanghai Gold Exchange (SGE) in October 2016 during the promotional "Dubai Week in China," the listing of the Shanghai Gold Futures Contract, "marks the first-ever usage of the Shanghai Gold Benchmark Price in international markets," said Gaurang Desai, Chief Executive Officer of the DGCX, when he briefed the media earlier today on the sidelines of the ongoing Dubai Precious Metals Conference.

Financial derivatives such as futures and options allow traders of an underlying commodity, like gold or a currency, to hedge themselves against expected price fluctuations in the future. 

They can also be used for speculative purposes. The DGCX, which has 46 products on its quotations list, already launched Chinese yuan futures back in 2015.

In 2014, China replaced India as Dubai's biggest trading partner and has retained its lead since then. 

In 2016, bilateral exchange between the trading and tourism metropolis and the world's second largest economy was worth 45.23 billion dollars, accounting for 13 percent of Dubai's total foreign trade, according to Dubai Customs.

(Source: Xinhua)