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Dubai gold imports to slip in second half, exports rise |
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9/28/2006 9:17:04 AM |
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DUBAI — Dubai's gold imports are expected to fall slightly in the second half of 2006 against the same period last year, while exports are seen higher, the head of the Dubai Gold and Commodities Exchange (DGCX) said yesterday.
Dubai is a leading centre for the import and re-export of gold, bringing in 521,765 kg (1.150 million lb) of gold in 2005 and exporting 223,303 kg, the Dubai Metals and Commodities Centre (DMCC) said.
Dubai's gold imports fell 14.7 per cent in the second half to 243,069 kg against the same period last year, while exports rose 27.4 per cent to 162,067 kg.
"If you look at the six-month figures, imports are down and they will come in slightly down by the end of 2006," Colin Griffith, a senior DMCC official and head of DGCX.
"But exports are high and the dollar value coming in and out of Dubai is significantly higher."
Gold prices, which rallied in the first half of this year, rising above $700 an ounce, hit a three-month low in mid September at $578.50 on weaker oil prices.
Dubai is one of the world's top gold consuming countries, and is a major hub of the physical gold trade in the Middle East and Asia. "Consumption is down a little bit down because of higher prices, but the actual volume trade has gone up because you get other businesses coming in, particularly Dubai has become very important centre for refining of scrap gold," Griffith said. Scrap supply had risen and physical buyers would step up gold purchases after prices stabilised. Gold is seen as a safe-haven metal and as a hedge against inflation. The metal is also influenced by oil, currency moves, and generally trades in the opposite direction of the dollar.
Griffith sees the turnover on Dubai's new gold futures exchange rising steadily this year as more of its 188 approved trading members get fully integrated into the system.
"We are seeing about 2,500 contracts on average a day and the market is very capable of averaging the level of 10, 000 contracts by next June," he said.
"Members are still adjusting as they have not had a futures market to trade on in this part of the world before and it is growing in the right direction."
Total volumes, including other commodities, were expected to rise to 20,000 contracts from 5,000-6,000.
The exchange, which started operations about ten months ago, has launched five futures contracts, dealing in gold, silver and currencies. It plans to introduce steel futures in October and is working on other agricultural commodities such as sugar and cotton.
"There is a lot work going on to include other base metals and agricultural contracts besides some more energy products."
"In 2007 and 2008 we will launch 75 to 80 per cent of those contracts," Griffith added. |
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