The announcement that Dubai Multi Commodities Centre and the World Gold Council have created a new company to launch an ETF gold security that will comply to Sharia law is fascinating, in that many people in the United States, for non-Sharia reasons, have looked to do similar things. I'm referring to the shares being backed by physical gold.
The fund, named Dubai Gold Shares, will trade on the Dubai International Financial Exchange once approval is garnered from the Dubai Financial Services Authority.
The World Gold Council is an industry body that is funded by the top gold mining companies in the world. The WGC, along with the DMCC didn't reveal their stake in the joint venture.
As far as the gold bars backing the shares go, they will be of Dubai and London Good Delivery Standard, and will be placed in the vaults of DMCC, and a sub-custodian, HSBC.
Dubai Gold Shares will be denominated in U.S. dollars.
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