The Hong Kong Exchange & Clearing’s (HKEX) new physical gold contract will likely only be launched in the beginning of or the first quarter of next year, Charles Li, chief executive of HKEX, said on Monday.
The exchange had said that it hoped to launch the contract in the second half of this year, though Li had said during LME Week Asia in June that will be launched in September.
Li, however, downplayed the later launch timing saying that it “is not a delay”.
“We are going to finish it up, make sure things are right. Also, there is a regulatory angle,” he told reporters at a press briefing at the FT Commodities Asia Summit here on Monday.
“This is the first time we are introducing a physically settled gold contract and we want to get it right,” he said.
One of the key features of the contract is that it is traded simultaneously in US dollar and the offshore yuan, in which the exchange hopes to offer arbitrage opportunities to market participants via the contract.
The contract is likely to appeal given the region’s affinity for gold kilobars of 99.99 percent purity and the fact it will offer physical delivery in Hong Kong vaults, sources told FastMarkets back in December.
but it faces strong competition – already serving the region’s needs for yuan-denominated gold are the Shanghai Gold Exchange and its international subsidiary, the Shanghai Gold Exchange International (SGEi).
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Source: Bullion Desk News
