The Moscow Exchange (MOEX) announced that it intends to begin offering precious metals trading later this year. Expected products will include spot gold and silver contracts denominated in rubles per grams as well multi-duration swaps contracts. The new precious metals products will fall under the MOEX’s FX trading division with trades consolidated, settled, and cleared within the unit’s risk management system.
In launching the product, the MOEX is touting the hedging opportunities, cost advantages, and credit infrastructure market participants will have access to. According to the MOEX, the “this new marketplace private investors will enjoy a new instrument serving as an alternative to OTC trading with impersonal metal accounts and offering minimum spreads and short selling opportunities”. The metals trading also fits within the exchange’s goal of appealing to a broader global audience as they bolster to strengthen their status of the premier venue for trading ruble denominated derivatives and FX contracts.
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However, when asked about the potential of the product launch, a member of an internationally based large Russian broker whose firm is prominent player in FX trading, but was unauthorized to speak, told Forex Magnates that he was skeptical about the precious metal trading outlook, saying “I am personally doubtful that they will generate significant liquidity, difficult to see what value this adds in a global context and not convinced there is much in the way of local demand. They do put up a lot of new contracts, often on a quite speculative basis – liquidity remains concentrated in very few.”
Inquiries to the MOEX about liquidity and demand were unanswered by publishing time.