DGCX February 2006 - Market activity report

A total of 16421 kilograms of gold futures contracts were traded in February 2006 as against 6475 traded in January - a massive increase of 154%. The average number of contracts traded per day also increased from 260 in December 2005 to 360 in January 2006 and to 821 in February 2006 - an increase of 228% from January. Considering trading pattern of the last week of February 2006, average number of contracts traded has shot up to nearly 1000 contracts per day.

A record volume of 1257 kgs in respect of gold futures contract for April 2006 was registered on 28th February. It was the highest ever volume/day for any single contract recorded on the Exchange so far. The Exchange achieved another milestone during February when the highest ever daily volume of 1416 contracts was recorded on 21 February, 2006.

In value terms, $ 293.36 million of gold futures were traded in February 2006 as compared to $ 115.09 million in January - an increase of 155%. The total value of gold futures traded on DGCX since inception (November 22, 2005) now stands at $ 517.48 million (29,575 kilograms of gold futures contracts).

The average daily value of gold futures traded stood at $ 14.67 million in February 2006 indicating the increasing participation of DGCX members. In the absence of any major structural changes in the physical gold market, such a hefty increase in daily average volumes reflects the growing confidence of the market participants in DGCX.

Out of the six series of Gold futures contracts listed at DGCX, the near month contract expiring in April 2006 was traded most heavily. A total of 14199 April 2006 contracts were traded in February. The collective volume of all distant month contracts during the month of February was at 2162 contracts as against 1875 contracts traded in January 2006.

The open interest i.e. number of contracts executed (bought or sold) but not closed out by the participants, as on February 28, 2006 was at 589 contracts valued at $ 10.62 million on the basis of 28th February closing price.

Number of members enabled by the exchange for trading has increased to 75 as on February 28, 2006 as against 70 on January 31, 2005.

Settlement of February 2006 contracts

Meanwhile, the delivery arising out of February 2006 contract was settled smoothly. A total of 29 Kilos of gold was delivered using the Dubai Gold Receipt (DGR) system. Interestingly, the quantity delivered translates into 6.03% of the average daily open interest of around 480 contracts..

Movement of Gold prices on DGCX

Gold prices at DGCX moved in tandem with the prices at major international markets. DGCX April 2006 gold futures contract opened at $ 573.5/ troy oz. on February 1, 2006. During the month it touched its highest ever traded price of $ 578.70/ troy oz. on 2nd February and dipped to a low of $538/ troy oz. on 15th February, 2006. Prices bounced back towards the end of the month to close at $563.40/ troy oz. on 28th February, 2006.