What surprised me was the hidden group of Gold traders who believe in Click and Mortar model and basically work around actively in Gold spot trading online. The world have been changed, so those Gold traders. Now, most of those gold Merchants are trading online to get their share of Spot Gold trading.
For the shock, Gold souq traders are hedging their gold with spot gold and most of them , are quite professional in this field. These traders are well known in local markets and trading condition , they have are so marginalized that no Forex Broker in Dubai could give them more attractive deal to come on-board.
We don't like to trade with DGCX since their revenue stream for margins is quite bad for us. Since their spreads are quite high, we usually don't opt for this. One Gold trader told on the term of anonymity.
There are also some local brokers, who are sitting around in Gold souq, and doing the business illegally. For local Gold traders, They dont see it a danger to trade with those local brokers, since they have trust and know each other. All go well, since we are having their guarantee and nothing is making an issue when it comes to withdrawal.
We only work when it comes to personal guarantee, we know the person personally and he is been in Gold souq for 2 decades, one Gold merchant told. For me, i would never opt for UAE regulated Forex Broker or FCA or any internationally regulated broker I dont trust them.
For an estimate, around 200 Gold Merchants are actively hedging their physical gold with online spot gold trading in Dubai, For most of them, its win win situation and they get benefit of volatility of the market.
Few of these Gold traders been approached by regulated Forex brokers in DFSA but margins and spreads these gold traders are demanding not have any thing remained for brokers. We try to convince them , come and trade in regulated market but they refusing because no good deal for trading available for these smart gold traders.
Gold souq look too vibrant to be a traditional Gold trading at retailer level, but inner story reveals these traders are way advance then what FX industry think. However, there are lot of loop holes which might never be filled, since gold traders have traditional approach doing online trading and they are quite happy with this. But in future, it could happen to create
biggest scam in the history of Dubai Forex Trading.