Mostly: Classical

[amarksp]

Louis, do you think Dubai Metals Exchange will take significant market share from London? Imports of 525 tonnes/year PHYSICAL gold already makes Dubai a very significant market. By comparison GLD has accumulated only 207 tonnes. How will Dubai potentially impact the gold trading market? Have you thought about this any...

http://www.dmcc.ae/GOLD.htm

"Dubai is continuing its relentless march into the centre of the bullion market, with plans to start futures trading in the precious metals and other innovations proving successful.

Dubai is rightly known as the hub of the physical gold market, feeding both to the Indian sub-Continent and to the Middle East, which on average over the past ten years have accounted for 38% of gold fabrication and in 2004 accounted for 43% of total (GFMS figures). We have written before about the development of the Dubai Metals and Commodity Centre and its proactive behaviour towards the gold market with the latest development being the establishment of futures trading...

Strong demand is seen boosting Dubai's gold imports to 525-540 tonnes by the end of 2005, despite the recent jump in prices, the Dubai Metals and Commodities Exchange's gold executive director said....

The exchange will trade from 10:00am to 11:00pm local time Monday to Friday, thus overlapping with the Far East and North American markets. And a new development is that the Exchange will also open on Saturdays and Sundays as of early 2006."

As previously mentioned, LBMA daily volume/transfers of 16 million ounces equals over 11,000 tonnes per month... That's huge volume and it will be interesting to see how much of this Dubai can pick up.
http://www.lbma.org.uk/clearing_table.htm

Geopolitically, things get interesting. At least 33% of Dubai 525 Tonne is likely from Saudi Arabia/Mid East Oil petro dollars. Believe the Arabs likely desire to move their physical from London/US banks and vaults to safer vaults at Dubai exchange...

Dubai appears to be an interesting development. Have you or any of your colleagues given this any thought on how it may impact the gold trading market?

Thanks in advance for any comments.