CME Moves to Fix the Gold Market Dislocation

With gold markets struggling to operate efficiently due to delivery concerns, CME Group has announced the launch of a new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars.

The new contract is expected to launch with a first expiration of April 2020, pending regulatory approval and will provide a solution to the issue of its Comex exchange previously only supporting the 100oz bars.

“This time of unprecedented market conditions has led to growing demand for a broader range of delivery needs for our clients worldwide,” says Derek Sammann, senior managing director and global head of commodity and options products, CME Group. “By offering a choice of delivery sizes as well as inter-commodity spreads with our benchmark gold futures, this new contract will provide customers with maximum flexibility in managing physical delivery.”

The new futures contract will be available for trading on CME Globex and for submission for clearing via CME ClearPort, and will be subject to the rules and regulations of Comex. The approved brand list for this product will have complete convergence with the approved brand list for CME Group’s existing gold futures and the LBMA gold good delivery list.

A specific launch date is expected to be announced later this week.

Colin Lambert

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