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DUBAI Strategically Located Between Gold Producing & Consuming economies

The New Jeweller UAE bureau spoke in an exclusive with Gautam Sashittal, CEO, DMCC go insights about the 6th Annual Dubai Precious Metals Conference and the importance of the same in the current global geo political economic scenario. Excerpts:

The 'Dubai Precious Metals Conference' is scheduled in April this year. What according to you would be the focus during this Conference with respect to Gold, Platinum & Silver as precious metals keeping in mind the current global economic scenario?

The Dubai Precious Metals Conference is in its sixth edition this year. The theme of the conference is 'Connecting Markets - the New Era of Global Trade'. What does this mean? Trade, especially in precious metals, has been steadily moving East. China and India are the two largest consumers of gold, and the producing countries are primarily in Africa. Dubai is strategically located, between the producing and consuming countries, and on China's maritime 'silk road'. Another aspect of the conference that I will mention briefly is that Dubai's bullion industry is unique in that it represents almost all of the supply chain, from refining to bullion trade to jewellery manufacture and retail. And the Dubai markets, as you are aware, is constantly innovating and staying well ahead of the curve. This edition of the conference will debate the future of the precious metals industry in the context of a changing US political scenario, the impact of Brexit, China's 'one belt one road' initiatives. Other interesting subjects that will be debated include the implications of taxation for gold in global hubs, the application of the gold Shariah standard and the impact on emerging technologies such as 3D printing on traditional manufacture and fabrication.

Responsible Sourcing is a subject that the industry has been dwelling on for a number of years now. Do you think the state of 'Responsible Sourcing' with respect to mining economies has improved? If no, what according to you are some of the important points that such economies need to keep in mind?

The responsible sourcing programme, initiated and championed by the OECD, has grown over the years. Our own responsible sourcing programme for the Dubai Good Delivery (DGD) has developed into a mature programme, of which we are proud. Responsible sourcing is necessary, but we have to remember that it adds cost to the industry. So alignment of the various programmes is vital. Furthermore, the purpose of these programmes is to ensure that only responsibly mined gold enters the supply chain. But one must remember that some 20 million owe their livelihoods to mining and there could be a risk the programmes may result in certain of these communities losing their livelihoods. So it is equally important that these programmes extend to supporting the communities and supporting governments build capacity in their countries. You can also find more information on our website www.dmcc.ae.

Can you in brief tell us about the importance of 'Global Gold Shariah Standard' and its implementation on the Gold exchanges?

The global gold Shariah standard is certainly a conversation starter. Shariah-compliant financial assets today exceed USD 1 trillion globally, and if the gold industry can access even 1 percent of this market share, it represents a phenomenal opportunity that was not accessible previously.

Currently discussions are taking place around how the standard will be implemented and put into practice, in fact we have a panel discussion on this topic at the DPMC with representatives from Amanie Advisors - one of the leading Islamic financial consultants, Emirates NBD, and Bank Lombard Odier & Co, so watch this space.

What is your vision towards the 'Dubai Gold & Commodity Exchange’ and how soon do you see it happening?

As the Region's only derivatives exchange and clearing house, the DGCX has been integral in providing the industry with infrastructure required to trade efficiently and with confidence.

Indicative of its success, 2016 was a record-breaking year with a growth of 36% year-on-year, reaching its highest annual traded volume with an aggregate of 19.7 million contracts.

This has been primarily driven by our focus on continually innovating and updating our infrastructure and services, with some of the most notable developments being our spot gold contracts and most recently, DMCC and DGCX announced the first landmark yuandenominated gold future product to be offered outside of China, obtaining a license from the Shanghai Gold Exchange (SGE) to list Shanghai Gold Futures in Dubai using the Shanghai Gold Benchmark Price.

Today, DGCX has the most welldeveloped exchange traded gold portfolio. Our futures contracts include a USD denominated kilo bar contract, an INR denominated gold contract and the most recent Chinese Yuan denominated futures contract. So market participants can trade all the three key global futures indicators on a single platform, with its attendance benefits such as the efficiency of capital allocation. When you add to these, the spot gold physically deliverable contract, then you have the complete portfolio. But this does not stop here because we are looking at more additions to our gold portfolio in the future.