Asia can surpass Europe as the centre of gold trading, Intercontinental Exchange’s John Ho told delegates at the Dubai Precious Metals Conference, with Dubai potentially integral to this shift.
“People believe that the Asian time has come, that trading in Asia is now and it needs to happen in an Asian time zone,” he said. “Europe is over, Asia is now.”
Ho, director of Asia Pacific at ICE, was speaking ahead of the exchange’s launch of a Singapore-based, physically settled kilobar gold futures contract.
Although Dubai can become part of this key movement of gold from West to East given its strategic location between Europe and Asia, any hub requires trust before it can succeed, he warned.
It needs political stability, legal and financial stability and “certainty that if I were to buy something I get what I paid for”, he said.
Dubai has the resources allowing it to become one of the world’s busiest logistical hubs, including one of the world’s largest airports, port access from the Arabian Sea and vast investment in infrastructure.
The shift of gold from West to East has been prominent for some time but the launch of more Asian gold contracts will exacerbate the move, with CME’s kilobar contract rolled out earlier this year.
There is also wide speculation that the Shanghai Gold Exchange will launch a yuan-denominated kilobar fix on four-nine bars some time this year. While SGE vice president Song Yuqin was vague on the matter when speaking to delegates at the conference, he admitted that several new products are possible for 2015.
(Editing by Mark Shaw)