Hong Kong's US dollar gold futures trading broke a record on Monday, with 6,676 contracts changing hands after HKEX waived fees and relaunched the product. The surge comes a day before the city switches on a gold clearing and settlement system in its push to become a global bullion hub.
Trading in Hong Kong's US dollar gold futures hit an all-time high on Monday, with 6,676 contracts traded during the day session, surpassing the previous peak of 3,039 contracts set in November 2022. Hong Kong Exchanges and Clearing (HKEX) reported the figures in a LinkedIn post as it relaunched the product.
The jump followed a fee waiver. HKEX said it would waive fees on its US dollar gold futures for a year, starting Monday, according to a circular sent to gold traders. The exchange is pressing to make the city an international trading hub for the precious metal.
Tight spreads and broad participation
Bid-ask spreads for active contract months were as tight as one tick, or US$0.01, for the August contract and two ticks for the December contract, HKEX said. According to HKEX, the effort has "drawn broad participation from across the market", including banks, securities firms, high-frequency trading firms, trading houses, gold producers and consumers.
A clearing system launches next
Hong Kong will launch a long-awaited gold clearing and settlement system on Tuesday, a step towards becoming an international price-setter for gold, two separate sources told the South China Morning Post. The city's pension fund is also expected to change rules later this week to allow more investment in gold exchange-traded funds.
HKEX said the gold futures contract relaunch supports Hong Kong's development as a leading international gold trading and storage centre.
Source: South China Morning Post
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