The Dubai Gold and Commodities Exchange (DGCX) has reported its monthly trading volumes for February 2017, once again showing a sustained YoY growth across its futures and Indian rupee contracts.
Following Indian Union Budget proposals and the ongoing state assembly elections, which have stirred volatility in Indian markets, Average Daily Volumes (ADV) in DGCX’s product suite touched a record 62,844 contracts a day in February.
Building on the standout performance, the DGCX witnessed high volumes in the currency segment, with its flagship Indian rupee contract signifying the growth trajectory. More specifically, ADV on Indian rupee options registered notable year-on-year growth of 92% with just under 50,000 lots trading. The UAE’s bourse also saw the highest monthly Average Open Interest (OI) of 23,275 contracts, signifying increased interest and liquidity.
On the energy front, Dubai India Crude Oil futures also registered the highest monthly volume of 5,980 contracts in February 2017. This helped energy products on DGCX record a combined volume of 17,139 contracts.
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Many of DGCX’s products are geared towards offshore investors, that is why it often sees spikes of trading activity in Indian referenced contracts. The demand is likely based on the usage of these products for hedging purposes when financial markets are experiencing sharp volatility.
Sustained volatility on global woes
The uptick in precious metals prices was a main vehicle of growth at DGCX during February 2017. Additionally, signs of improvement in Asian demand during the Chinese New Year had a positive impact on the precious DGCX gold futures which witnessed robust trading activity with 56 percent growth in the month prior.
Commenting on the exchange’s performance, Gaurang Desai, CEO of DGCX, said: “Volatility is likely to trend higher through the course of the year as markets react to a range of unknowns including the anticipated US Federal Reserve rate hike in March, the upcoming European elections and the impact of US policy changes.”
“In light of these events, we will continue to strongly push forward our agenda of providing market participants with a diverse array of products and solutions which will not only help them to effectively manage their risk, but also protect them from rapid market fluctuations and the prevailing economic uncertainty,” he added.