Hong Kong’s HKEX to Launch USD and CNH Gold Futures Next Month

The new contracts are a follow-up to new products launched by the HKEX in recent months, including USD/CNH futures.

The operator of Hong Kong’s stock exchange, Hong Kong Exchanges and Clearing Limited (HKEX), today issued an announcement to mark the launch of Offshore renminbi (CNH) and US dollar (US$) gold futures, which will be available on its platform as of Monday, 10 July 2017.

The inclusion of the new contracts is a further expansion of HKEX’s metals solutions, and serves to enhance market transparency, reduce risk and lower costs for users. It also marks the first pair of commodity futures that can be physically delivered in Hong Kong.

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The exchange operator sees an opportunity as increasing regulatory scrutiny is raising costs for banks trading gold over the counter (OTC) in bilateral deals. Regulators are pushing for a more transparent, centrally-cleared model.

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The HKEX hasn’t detailed the fees for trading and clearing for the new contracts, but said that it will waive those fees during the first six months. In addition, the new products are exempted from the Commission Levy throughout the same period.

Liquidity providers and proprietary traders have partnered with the HKEX and committed to supplying liquidity. They also will run an educational program to enhance investors’ knowledge of the new gold futures.

The new instruments are designed to add another layer of gold trading, aiming for a chunk of the multi-billion dollar gold business, and will include contracts for spot and monthly futures.

According to the statement: “The 12 Contract Months on the launch day will comprise the Spot Month (August 2017 ) and next 11 calendar months (September, October, November, December 2017 and January, February, March, April, May, June, July 2018).”

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