TOCOM Reports Strong Activity in October – Highest Overall Figures since April 2013

Japan’s main commodity derivatives Exchange has reported upbeat trading metrics for the month of October. The multi-product venue saw record trading across all instruments. The recent spike in market Volatility supported the growth in numbers.

The Tokyo Commodity Exchange (TOCOM) reported its monthly operating metrics, the venue noted that its average daily trading volume for October was 111,633 contracts, up 21.3% from September. TOCOM’s core commodities saw a significant increase in volume. Gold was up 14.7% to 45,460 contracts.

Platinum was up 27.9% to 25,094 contracts and Crude Oil was up 43.1% to 4,808 contracts. The average daily volume recovered to levels last seen in June 2013. Overall, monthly trading volume also increased to the highest level since April 2013, at 2,455,916 contracts. Volume on October 31 was 179,282 contracts, the highest this year.

Commodity markets saw a backlash during October. Recent data from the world's largest gold-backed exchange-traded fund, the SPDR Gold Shares, reported that it saw an outflow of investor funds of over $1 billion.

Data from the GLD fund (on Yahoo finance) shows that the ETF is trading near its 52-week lows, currently trading at 110.08.

TOCOM’s gold prices faced a volatility period in October, the precious metal hit a four month low of 4,176 yen per gram reached on October 6 on improving U.S. economic indicators and expectations for higher interest rates. Prices fluctuated following a rise in U.S. stock prices and a growing demand for physical gold, as well as the buying of gold as a safe haven asset in a slowing economy.

In addition, the firm noted fluctuations in its energy offerings. Its Crude Oil prices dropped to a nearly 2 year low of 54,750 yen per kiloliter on October 17 as production expanded and concerns of a lower demand grew in Europe and China. Prices bounced back when expectations for demand stabilized, U.S. equities rose and the yen weakened.

CQG recently extended its market data coverage, TOCOM, which was made available through access points in Chicago. The news is expected to bolster the increase in trading of overseas participants. The firm reported that foreign participation accounts were around 40% of TOCOM’s overall volume and hit a record high at 44% in September 2014.