The Dubai Gold and Commodities Exchange (DGCX) is in an advanced stage of talks with a local bank on its plans to launch a spot gold contract, a senior executive at the exchange said.

DGCX had said early last year that it planned to introduce a spot gold contract as part of its growth as a top trading centre for the precious metal. The launch had originally been scheduled for last June, but has been delayed.

"We are in advanced stages of talks with a local entity," Ian Wright, chief business officer at DGCX, told Reuters. He did not disclose the name of the local bank, but said the contract should be launched in the "near future".

Wright said the contract was taking longer than originally planned because DGCX wanted to make sure it came up with a product that worked well for market participants. The exchange, which currently trades gold futures, said last year that the spot contract was expected to be for 1 kilogramme (32 troy ounces) of 0.995 purity gold.

Trading a spot contract might require Dubai to host substantial operations by bullion banks, which are investment banks that function as wholesale suppliers to the market.

Asia, home to the world's top two gold buyers, China and India, has been keen to gain more pricing power over the metal and challenge the dominance of London and New York in trading.

The Singapore Exchange launched a 25 kg gold contract last October, after a short delay due to technical issues in setting up the trading system. Shanghai launched international gold contracts last September, opening up its gold market to foreign players for the first time. - Reuters