World gold trade focused on Dubai
Netherlands went through a period known as the Golden Age.This refers to the country’s 17th century heyday, when Holland was the world leader in trading (commodities), science and art.
And it was during this time that the first share was issued. This Dutch invention introduced a new form of financing: Equity.
The world’s largest company at that time was a Dutch trading group, VOC, and it issued shares to gather in money with which to invest.
A lot has changed since then; after all, the economic cycle is dynamic. Today’s world shows a different picture, and things are still evolving.
Currently, rapidly developing regions, such as Asia and the Middle East are becoming more powerful, often at the US’ expense. Our rapidly changing economy is also facing changes in the world of gold.
The Dutch traded a lot of gold in the past and Amsterdam was the world centre for gold and diamond trading for a long time. These days, Dubai is becoming the world centre for gold and gold trading.
Gold trading hub
With the Middle East, China and India as important importers of gold, Dubai can be viewed as the principal hub of trading and distribution, as witnessed by the World Gold Council’s recent launch of Shariah –compliant gold shares on the Dubai International Financial Exchange, in conjunction with the Dubai Multi Commodity Centre.
According to GFMS Gold Survey (2006) the world’s production of gold (2,919 tonnes) is distributed geographically in the following proportions; to China (800); India (700); the Middle East (535); Europe (444); North America (235); Russia (87); South America (75); and Australia (10).
Interest in gold has mushroomed recently, partly due to its price surge. The Dubai Gold & Commodity Exchange (DGCX) profits from this interest in commodities in general and in gold in particular, as witnessed by the launch of trading.
In 2007 a total of 1 million commodity contracts (worth $35bn) were traded, showing a rise of 50% on 2006 volumes. Gold futures remained the highest contributor, accounting for a total of 700,000 contracts over the course of the year, valued at approximately $15bn.
Principal exchanges
So which exchanges can be viewed as DGCX’s competitors or rivals?
The London Metals Exchange (LME) is the futures exchange which hosts the world’s largest market in options and futures contracts in base and other metals.
As the LME offers contracts with daily expiry dates up to three months from trade date, as well as longer dated contracts, it also allows for cash trading. It offers hedging, worldwide reference pricing and the option of physical delivery to settle contracts.
Contrary to what you may expect, gold and silver are not traded on LME (so it is not a direct competitor of DGCX), but on the over-the-counter (OTC) market usually referred to as the London Bullion Market by the members of the London Bullion Market Association. Platinum and palladium are traded on the London Platinum and Palladium Market.
In Asia you can look at the Multi Commodity Exchange (MCX) in Mumbai, the Tokyo Commodity Exchange (TOCOM) and the National Commodity Exchange Limited in Karachi.
In the Americas: The Brazilian Mercantile & Futures Exchange (BMF), the New York Mercantile Exchange (NYMEX) and the Chicago Mercantile Exchange (CME).
CME and Chicago Board of Trade (CBOT) merged in the summer of 2007 and since then the CME Group (“the Merc”) has been the world’s largest futures exchange. In the near future, mergers and acquisitions between exchanges will continue; after all, the world is dynamic, and so is the economic cycle. /AME Info/
And it was during this time that the first share was issued. This Dutch invention introduced a new form of financing: Equity.
The world’s largest company at that time was a Dutch trading group, VOC, and it issued shares to gather in money with which to invest.
A lot has changed since then; after all, the economic cycle is dynamic. Today’s world shows a different picture, and things are still evolving.
Currently, rapidly developing regions, such as Asia and the Middle East are becoming more powerful, often at the US’ expense. Our rapidly changing economy is also facing changes in the world of gold.
The Dutch traded a lot of gold in the past and Amsterdam was the world centre for gold and diamond trading for a long time. These days, Dubai is becoming the world centre for gold and gold trading.
Gold trading hub
With the Middle East, China and India as important importers of gold, Dubai can be viewed as the principal hub of trading and distribution, as witnessed by the World Gold Council’s recent launch of Shariah –compliant gold shares on the Dubai International Financial Exchange, in conjunction with the Dubai Multi Commodity Centre.
According to GFMS Gold Survey (2006) the world’s production of gold (2,919 tonnes) is distributed geographically in the following proportions; to China (800); India (700); the Middle East (535); Europe (444); North America (235); Russia (87); South America (75); and Australia (10).
Interest in gold has mushroomed recently, partly due to its price surge. The Dubai Gold & Commodity Exchange (DGCX) profits from this interest in commodities in general and in gold in particular, as witnessed by the launch of trading.
In 2007 a total of 1 million commodity contracts (worth $35bn) were traded, showing a rise of 50% on 2006 volumes. Gold futures remained the highest contributor, accounting for a total of 700,000 contracts over the course of the year, valued at approximately $15bn.
Principal exchanges
So which exchanges can be viewed as DGCX’s competitors or rivals?
The London Metals Exchange (LME) is the futures exchange which hosts the world’s largest market in options and futures contracts in base and other metals.
As the LME offers contracts with daily expiry dates up to three months from trade date, as well as longer dated contracts, it also allows for cash trading. It offers hedging, worldwide reference pricing and the option of physical delivery to settle contracts.
Contrary to what you may expect, gold and silver are not traded on LME (so it is not a direct competitor of DGCX), but on the over-the-counter (OTC) market usually referred to as the London Bullion Market by the members of the London Bullion Market Association. Platinum and palladium are traded on the London Platinum and Palladium Market.
In Asia you can look at the Multi Commodity Exchange (MCX) in Mumbai, the Tokyo Commodity Exchange (TOCOM) and the National Commodity Exchange Limited in Karachi.
In the Americas: The Brazilian Mercantile & Futures Exchange (BMF), the New York Mercantile Exchange (NYMEX) and the Chicago Mercantile Exchange (CME).
CME and Chicago Board of Trade (CBOT) merged in the summer of 2007 and since then the CME Group (“the Merc”) has been the world’s largest futures exchange. In the near future, mergers and acquisitions between exchanges will continue; after all, the world is dynamic, and so is the economic cycle. /AME Info/
1 comment:
The world gold trade must be focused on Dubai
because US Fed Chairman Ben S. Bernanke is a lunatic
who wants his Fed to pay interest on bank reserves.
The essence of the conventional commercial banking model is not riba, […]. It is riba plus gharar. (1)
Riba means usury and is forbidden in Islamic economic jurisprudence. According to some, this refers to excessive or exploitative charging of interest, though according to others, it refers to the concept of interest itself. (2)
Gharar is the sale of probable items whose existence or characteristics are not certain, due to the risky nature that makes the trade similar to gambling. (3)
Bernanke wants riba, plus gharar, PLUS LUNACY.
Indeed,
Bernanke wants his Fed to pay interest on bank reserves. (4)
[The] link between oil and the euro may weaken, it is not about to disappear, says the Financial Times today. (5)
As I said earlier this week on these pages, the euro is indeed evolving to the gold-euro. (6)
Others are still in denial:
Top officials also want to avoid dollar weakness reinforcing the rise in oil prices. They do not think the dollar is the main cause of the rise – oil has gained on days when the dollar has strengthened. But they agree that dollar weakness has at times contributed to oil’s strength. (7)
The question is not whether or not one is opposed to the dollar unit.
The question concerns the maladministration of the dollar unit by the colonial dollar-regime.
At the end of the day, this is no longer working in a globalising world.
Such a world requires “equilibrium” in order to continue functioning.
Hence,
the USA must continuously wage war in order to prevent the dollar-regime from being submitted to a closer examination
because
such an examination would result in its adaptation to reality.
Indeed,
the examination would reveal that the dollar-regime is based on electronic digits, not on real wealth.
Money in Islam must possess intrinsic value, says the Qur’an. (8)
“Abu Said al-Khudri reported Allah’s Messenger as saying: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt. (When a transaction is) like for like, payment being made on the spot, then if anyone gives more or asks more he has dealt in Riba, the receiver and giver being equally guilty.” (Sahih Muslim)
Real wealth,
such as gold, silver, wheat, barley, dates and salt,
can be distributed in an equitable way.
The electronic digits of the dollar regime are not real wealth
and are thus arbitrarily being divided.
In order to hide this truth, Bernanke wants his Fed to pay interest on bank reserves.
This is riba, plus gharar, PLUS LUNACY.
In order to counteract this lunacy, the world gold trade must be focused on Dubai.
Ivo Cerckel
NOTES
(1)
A discussion on current accounts
http://www.islamic-finance.com/item150_f.htm
SNIP
The following is the text of an email exchange that took place during the period September 2007 - March 2008 between an executive officer and Shari`ah advisor of an Islamic commercial bank and Tarek El Diwany regarding the fiqh position on bank current accounts, reproduced with the kind permission of those involved. The names of the bank and its employees have been changed to maintain confidentiality.
(2)
http://en.wikipedia.org/wiki/Riba
(3)
http://en.wikipedia.org/wiki/Islamic_banking
(4)
Bernanke Wants Fed to Pay Interest on Bank Reserves
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aOm_fLe0pDxk
SNIP
May 7 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, seeking ways to stabilize money markets, will ask Congress for authority to pay interest on commercial-bank reserves this year, a person familiar with the discussions said.
The central bank isn't authorized by Congress to begin making such payments until 2011. Allowing interest on bank reserves may allow the Fed to pump more funds into the banking system without pushing its main policy rate lower, in effect separating action to boost liquidity from monetary policy.
(5)
The Short View: Euro and oil
By John Authers, Investment Editor
Published: May 7 2008 21:02 | Last updated: May 7 2008 21:02
http://www.ft.com/cms/s/0/1232f96e-1c5d-11dd-8bfc-000077b07658.html
(6)
Experts to bring the Euro perspective to the Gulf
04 May, 2008
http://www.dubaichronicle.com/2008/05/experts-to-bring-euro-perspective-to.html
(7)
Europe and US unite on stronger dollar
By Krishna Guha in Washington and Ralph Atkins in Frankfurt
Published: May 8 2008 02:01 | Last updated: May 8 2008 02:01
http://www.ft.com/cms/s/0/1f5097f2-1c6f-11dd-8bfc-000077b07658.html
(8)
Imran N. Hosein, “Explaining the Disappearance of Money with Intrinsic Value”, paper delivered at the International Conference on the Gold Dinar Economy, held in Kuala Lumpur, July 24-25, 2007
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