Two newly launched gold futures products in the Hong Kong market debuted to better than expected turnover on Monday, as gold traders credited physical delivery settlement and longer trading hours for the strong start.
The two products, one traded in U.S. dollars, the other in yuan, mark the third attempt by the local stock exchange to step into gold trading.
As of 7.30pm – 11 hours after their debut at 8.30 a.m. – 3,098 futures contracts had changed hands. Of these, 2,186 were priced in yuan and 912 in U.S. dollars. Each contract represents one kilogram of gold. They will continue to trade until 1am Tuesday morning.
‘The first day’s turnover of the two gold futures was better than expected. The gold market is pretty quiet on Mondays but the fact the HKEX could still achieve such a higher turnover make for a strong debut,’ said Jasper Lo Cho-yan, the chief strategist at King International Financial.
Short trading hours were blamed by many for the previous failures. The gold futures launched in 2008 only traded for eight hours a day, far below the Chicago Mercantile Exchange in the U.S. which trades 23 hours a day.
Lessons appear to have been learned; the two new gold futures markets in Hong Kong will trade for 16 hours a day.
This post was published at South China Morning Post
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