While the Dubai stock market DFM lost over 17 percent amid declining trading turnover in 2011, the Gulf Arab sheikhdom's commodity derivatives exchange DGCX is booming.

At the DGCX, which stands for Dubai Gold and Commodities Exchange, derivatives worth 185.13 billion US dollars changed hands last year, a 77 percent increase compared to 2010.

"Dubai has always been named 'City of Gold,' as it bridges the gold producing countries in Africa with the India, the world's top gold consumer," said DGCX chairman Ahmed Bin Sulayem on Monday at a commodities conference here.

"As more and more investors from China move to Dubai, the sheikhdom's role as a hub for jewel sales and gold trading is even increasing," he added.

Gold trading is also bug business for banks, jewelry chains and online trading companies. Gold.ae, for example, was founded in 2008 by its chairman Mohammed Abu-Alhaj from Pakistan. Abu-Alhaj told Xinhua that within three years Gold.ae managed to attract physical gold trading worth 600 million dollars in 2011.

"We do not deal with derivatives, as they are not allowed in Islam," he said.

Abu-Alhaj confirmed that Dubai was benefitting tremendously from the gold rush. "There is a war of currencies going on in the world, and gold is the winner."

In the last 10 years, the price of gold has risen from less than 400 dollars to almost 1,900 dollars per ounce in mid-2011.

The yellow metal currently trades at 1,676 dollars per ounce. But where there is light, there is also shadow. Many jewelry shops were forced to shut down in 2011 due to the gold price boom, as more and more Dubai tourists and consumers were unable to buy sparkling souvenirs.

In the shopping center Dubai Mall, half of the shops in the mall's "gold souq" are closed and mall owner Emaar Properties still looks for tenants to fill the empty stores.