Hongkong Reintroduces Gold Futures Trading After 10 Years of Absence

Tuesday, October 21, 2008

Hongkong has relaunched trading in gold futures on Monday, Platts reports:
Gold futures in Hong Kong relaunched trading on Monday on the back of an increased interest on gold, the Hong Kong Exchange and Clearing (HKEx) said in a statement on Monday.
Gold futures were first introduced to the Hong Kong Futures Exchange in 1980 but trading of the product was suspended in 1998.
Gold futures's trading hours in Hong Kong are from 8:30 am to 5:00 pm(0030 GMT to 0900 GMT), with no break for lunch. The contract size is 100 troyoz [one troy oz equals 31.1 grams], with the three contract months available for trading, including spot month and the next two calendar months.

Hongkong is mainland China's biggest gold trading partner and launched the contracts in order to satisfy investors demand. China started trading gold futures earlier this year.
"This is an ideal time to have gold futures in Hong Kong, not only because of the interest in the commodity, but also the greater volatility we are seeing in its price," HKEx Chairman Ronald Arculli said at gold futures launch ceremony in Hong Kong.
"The annualised 30-day volatility of gold has jumped from 10% in August 2007 to 50% in August this year. So gold futures trading here will enable investors to guard against unexpected moves in the international gold market as well as capture trading opportunities."
According to Arculli, Hong Kong is also mainland China's largest trading partner for gold, which, according to the World Gold Council, has been the world's largest gold producer since 2007. "Our city accounts for 20% to 30% of Asian gold exports, making it an important trading hub," he added.


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