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Tokyo Commodity Exchange Trading Volumes down in October

Gold and crude oil, including its derivatives, are the worst performers

The Tokyo Commodity Exchange (TOCOM) reported a 12.8 percent monthly decline in average daily trading volumes, from 109,962 to 95,896 contracts. The total amount of trades carried out on the exchange over the month of October stood at 2.013 million, versus 2.089 million contracts for September.

China and EU Economic Uncertainty to Blame

In a statement, the exchange attributed the decline to the market uncertainty shrouding the economies of China and the European Union, which, it said, kept volatility subdued. Yet open interest rose in October, boosted by gold and crude oil. Gold contract outstanding at the end of October reached 89,950, a 4.7 percent increase on September, and those for crude oil totaled 49,809, up 5.5 percent on the month. Overall open interest at the end of the month totaled 396,443 contracts.

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At the same time, average daily trading volumes (ADV) in these two commodities registered declines over the month. Gold ADVs were at 29,040, down 7.9 percent from 31,519 in September. Crude oil ADVs slumped 25.5 percent to 15,132 contracts, from 20,325 in September. Neither development should be particularly surprising, what with crude oil continuing to trade at multi-year lows and gold bearing the brunt of the Fed’s dovishness with regard to interest rates, losing most of its safe haven attractiveness for investors.

Silver a Surprise Winner

In fact, among metals and fuels, silver was the only one where ADVs improved in October on the Tokyo exchange, though their number was modest. Silver contracts rose to 250 daily in October, up 14.2 percent from the 219 contracts daily turnover in September.

TOCOM also reported that its star product was the Gold Daily contract, which reached the highest ADV for its six-month existence, at 70,124 contracts, on October 26. This has made the Gold Daily contract the second most traded, after the Gold Standard, and before the Platinum Standard contract. The bourse went on to note that the attractiveness of the Gold Daily contract is in its lack of a maturity date, which makes it well-suited for investors otherwise focusing on forex and other financial products without a maturity.

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