Dubai's gold coin aspires to be the next krugerrand
A Dubai free zone has launched the country's first gold coin that it hopes will one day serve as legal tender.
The Dubai Multi Commodities Centre Authority (DMCC) is holding talks with the Central Bank to designate the coin, worth more than Dh30,000 (US$8,167) at current prices, as the first gold bullion legal tender in the Middle East.
"The innovative gold bullion coin was conceived to satisfy the demands from investors seeking access to gold as protection against the ongoing global economic uncertainty," said Ahmed bin Sulayem, the executive chairman of DMCC.
Sharp falls in global stock markets have boosted the attractiveness of gold, which hit a record high of $1,813.79 an ounce on Thursday.
The prototype 24-carat, five-ounce coin, minted in Switzerland, is adorned with the face of President Sheikh Khalifa, President of the UAE, on one side, and an image of the Burj Khalifa on the other.
If it is given legal tender status, the coin could aspire to the stature of the South African krugerrand, which was first minted in 1969 to promote South African gold and became so popular that by 1980 it accounted for 90 per cent of the gold coin market.
Gold plays an important part in the national economy, with Dubai an important hub for the industry. Gold was ranked as the nation's top internationally traded commodity apart from oil in April, according to the Federal Customs Authority.
DMCC is the master developer and licensing authority for the Jumeirah Lakes Towers free zone, a mixed-use development near Dubai Marina. Owned by the Government of Dubai, DMCC also runs an exchange trading gold and other commodities.
Published: August 16, 2011 04:00 AM