Further evidence that global investors are switching their focus towards investments with less correlation to the turbulent equity markets has come to light after the Dubai Gold and Commodities Exchange (DGCX) announced on Monday that year to date volume has, for the first time, passed a record-breaking one million contracts, up 52% on last year.
According to the DGCX, higher trading activity was led by currencies, precious metals and crude oil, with trading valued at USD52bn and year-to-date volumes tallied at 1,020,000.
The news follows reports by the exchange of a record performance in the third quarter, when 385,000 contracts were traded, valued at USD20.5bn.
Other exchanges are experiencing similar phenomena, such as the Singapore Exchange, which announced in Monday that its derivatives market saw record volumes for both the July-September 2008 quarter and the month of September 2008.
Malcolm Wall Morris, Chief Executive, DGCX, said that intensified volatility in the global financial and equity markets has led market participants to shift resources to areas such as commodities and currencies.
“In the current high risk climate, commodity derivatives are offering the opportunity to diversify and achieve a balanced portfolio. During this time of economic uncertainty and increased counterparty credit risk, the record third quarter volume at DGCX also endorses the benefits of transacting and clearing transactions via the well regulated and low risk environment of an Exchange and clearing house," Morris observed.
"Conducting business on DGCX enables market participants to reduce their exposure to operational and counterparty risk,” he added.
Gold futures on the DGCX rose by 37% YTD (January-September), reaching 695,000 contracts, whilst the average daily volume for Gold futures stood at 3,200 contracts in September, up 51% on September 2007.
In currencies, the Euro led the growth with 94,000 contracts YTD, up 240% compared with the corresponding period last year.
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