David Rutledge

'The DGCX has developed into a very credible liquid market in just a short time,' says David Rutledge, the Australian born CEO of the Dubai Multi Commodities Centre.

'We only took one year to set-up the exchange in the first place so progress has been fast right from the start. And our move into currency contracts has been successful with euro/dollar, sterling/ dollar and yen/ dollar - with the sterling contract the most successful.'

The latest product to launch on the DGCX is the fuel oil contract which is still at a very early stage of development. 'This is based on the physical fuel oil market of Fujairah, which is the world's second largest bunker fuel port but this is a market that will take some time to develop,' explains Mr. Rutledge.

'In order to make the DGCX the exchange of choice it has to have something to offer above existing markets, such as the proximity to Fujairah, for example. It is the same with the gold contract which is based on the local market and for Dubai delivery with kilogram contracts that match the local physical market.'

Silver he says is at 'a much less developed stage', agreeing that precious metals have benefited from a bullish global market over the past year with gold ahead almost 20 per cent despite a big correction in May.

'I run the exchange and it is not my place to comment on the marketplace, thank goodness,' says Mr. Rutledge, a veteran of the commodities sector who first knew Dubai as the head of sugar trading for Australia in the early 1990s. 'But commodities are in an uptrend and there is plenty of room to trade volatility.

'As an investor in commodities you always have a choice between the commodity itself and shares in commodity producers. But if you own shares in a company you are exposed to the quality of the management, even the weather in a particular location and not just the underlying commodity price.'

The DGCX currently has 180 members, including global giants like HSBC, Deutsche Bank, Mitsui and Standard Bank as well as Indian based entities, commodity deals and brokerages.

'Growing the volume of trade and the number of types of contract available are more important than adding to the membership,' says Mr. Rutledge. 'It is possible to see volumes 10 or 20 times higher than they are today. We have not really scratched the surface yet.'

Could that business come from Saudi investors in gold? 'We have not seen it yet, but it could do,' says Mr. Rutledge. 'We are leveraged to up and down movements in gold, but so far do not have much exposure to the investing public.'