The retail contract would be fully backed by physical gold and held in electronic form with the option of physical redemption. This would attract a wider pool of investors and appeal to smaller, more risk-averse traders based in the region.

The Dubai Gold and Commodities Exchange (DGCX) said on Saturday it was considering whether to launch a new spot gold contract designed to be used by retail investors and traders.

The DGCX signed a memorandum of understanding with the Dubai Multi Commodities Centre, a body which facilitates commodity trade flows through Dubai, and National Bank of Ras Al Khaimah (Rakbank) to develop bullion products such as the proposed retail spot gold contract.

The contract could be smaller in size than the existing DGCX Spot Gold contract, which requires physical delivery of one kilogramme gold bars and has been used by several institutional investors since its launch in 2016, the exchange said.

The retail contract would be fully backed by physical gold and held in electronic form with the option of physical redemption. This would attract a wider pool of investors and appeal to smaller, more risk-averse traders based in the region, the exchange said.

The DGCX also offers trade in gold futures contracts and said late last year that it had obtained a license from the Shanghai Gold Exchange to list Shanghai gold futures, which would be the first yuan-denominated gold futures product offered outside China.