CME to launch physically settled Asian gold future contracts
Victoria Hewitt-Marsh, News Editor
25 Apr 2014, 10:47 a.m.
The CME Group plans to launch a physically deliverable gold futures contract in Asia, with the objective of targeting increasing investor demand in the world’s top gold buying region.
Once implemented it would enable the CME group to establish a pricing reference point for gold futures in Asia, in the same way that the COMEX gold contract currently establishes the benchmark for gold bullion futures contracts globally.
The CME’s COMEX contract is commonly used as a hedging mechanism for refiners and jewellers and in most circumstances the contracts are settled in cash.
Industry insiders are predicting that the contract will likely launch in either Singapore or in Hong Kong, with the smallest contract starting at 1 kilogram.