ICE to launch gold futures in 2017, competition in gold market grows

Oct 17, 2016 - 10:59 AM GMT

Intercontinental Exchange (ICE) will introduce a London gold daily futures contract in February next year, it said.

The new daily contract will be physically settled, traded in one-cent increments and call for the delivery of 100 fine troy oz of unallocated Loco London gold, ICE, which runs the daily London gold auction, said on Monday, October 17.

ICE will also introduce central clearing for the IBA gold auction, which it plans to make live in March 2017, it added.

“Central clearing is something that we have hoped to see ever since we started transitioning the benchmarks in 2014. Central clearing during the auction will allow the number of diverse direct participants to continue to grow,” LBMA chief executive Ruth Crowell said.

The London gold auction, which takes place twice daily, currently has 13 participants. Earlier today, the London Bullion Market Association (LBMA) said it will consult the market on the possibility of an additional gold auction to set a pre-morning price. The consultation between the LBMA, the IBA, the Singapore Bullion Market Association (SBMA) and market participants will look at setting an additional price at 14:00 Singapore time.

The LBMA – the international trade association that represents the wholesale over-the-counter market for gold and silver – is holding its annual conference in Singapore this week.

The LBMA recently chose Boat Services, in a joint submission with Autilla, as the service provider for its new trade reporting platform while it seeks to improve transparency in the London gold market.

London’s gold market is becoming increasingly competitive – earlier this year, the London Metal Exchange (LME) said it was planning to launch spot and futures gold and silver contracts in the first half of 2017.

“Exchanges want to find new contracts to list as there is lots of liquidity and cash in the market and they want to capitalise on that,” a Shanghai-based precious metals trader said.

(Additional reporting by Vivian Teo, editing by Mark Shaw)