32 Troy Oz Gold Futures
Gold
HKMEx is introducing a 32 troy ounce gold futures contract useable by a wide range of market participants to execute hedging, arbitrage and other investing strategies. Moreover, the HKMEx gold futures contract has the following important characteristics designed to meet the needs of a marketplace which lacks an international price-setting mechanism in the Asian time zone:
- Secure physical delivery in Hong Kong meeting international standards
- Trading execution on an advanced and robust electronic platform
- World-class clearing functionality
- Extended Asian day trading hours to tap into global market liquidity
- Contract specifications tailored to market participants in Asia
Gold is one of the world’s most important and actively traded commodities. Demand for the metal is driven by three main factors: the jewellery market, industrial manufacturing and financial investment. In addition, gold is relatively unique in that it is used as both a commodity and a monetary asset.
Although gold has a long trading history in Asia, the majority of price formation for gold is today concentrated in the North American and European markets. In recent years, the introduction of gold futures trading in Asia has tapped into latent trading demand that is primarily driven by strong economic development in China and India.
Hong Kong is historically one of the world’s leading gold centres and has a natural geographical advantage in Asia. Hong Kong’s vibrant financial infrastructure ensures access to leading market participants and deep regional and international pools of liquidity.
Trading hours for the HKMEx gold contract will extend from 0800 HKT to 2300 HKT, opening with TOCOM in Japan and encompassing the London Bullion Market Association AM Fixing, the opening of COMEX, and the LBMA PM Fixing. The HKMEx opening auction will run from 0730 to 0800.
While gold futures trading on Asian exchanges has demonstrated significant growth, there is currently no contract that is or will likely become a regional benchmark contract for gold pricing. Without a regional benchmark, true price discovery for gold is either confined to the local in-country market or must depend on the European or North American markets. In-country markets generally restrict foreign participation and often subject it to adverse currency restrictions or tax treatment. Meanwhile, global benchmark pricing from the western hemisphere provides imperfect hedging for Asia’s trading community.
HKMEx is well positioned to address the demand of Asia’s trading community for the establishment of a gold futures contract as the regional benchmark.
| Trading Unit | 32 troy oz |
| Grade and Quality | The delivery unit of Gold is 1 kilogram (32.151 troy oz), no less than 0.995 fineness, cast in one-kilogram bar, and bearing a serial number and identifying stamp of a refiner approved and listed by the HKMEx |
| Price Quotation | U.S. dollars and cents per troy oz |
| Tick Size | The minimum price fluctuation shall be US$0.10 per troy oz; US$3.20 per contract |
| Trading Hours | 0800 to 2300 (Hong Kong Time) |
| Trading Months | Current calendar month; the next two consecutive calendar months; any even months falling within a 12-month period starting with current month |
| Last Trading Day | The second Monday of the contract month. The Last Trading Day will be postponed to the next business day if the second Monday is a HKMEx holiday |
| Delivery Period | Four consecutive Hong Kong business days following the Last Trading Day |
| Delivery Site | Hong Kong |
| Trading Symbol | HKG |
Contract details are pending the approval of an Automated Trading Services (ATS) Licence from the Securities and Futures Commission.
Details will be published on these pages once HKMEx’s application for an Automated Trading Services licence is approved by the SFC.
Details will be published on these pages once HKMEx’s application for an Automated Trading Services licence is approved by the SFC.