HKEX plans to offer physically settled RMB and USD gold futures in Q3

Coming soon will be the first of their kind gold futures contracts denominated in CNH and US$ available on the same platform.

Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce physically settled CNH (offshore Renminbi, or RMB) and US dollar (US$) Gold Futures contracts in the third quarter of this year, subject to regulatory approval.

HKEX’s aim is to offer its market participants more choices and to provide more options for investors with offshore RMB.

Li Gang, HKEX’s Co-head of Market Development said:

Our Offshore Renminbi and US dollar Gold Futures contracts will be the first such pairing on the same exchange platform anywhere in the world. Our new Gold Futures will be helpful to gold users, from refiners and fabricators to jewelers who need to hedge gold price risk.  We also think they will be attractive to banks, fund managers and traders in the precious metals market.

The CNH contract will be a valuable addition to our expanding portfolio of Renminbi products.  The contract’s synergy with our USD-CNH Futures and other Renminbi derivatives will create arbitrage opportunities.

The underlying asset for HKEX’s planned Gold Futures, a 1-kilogram gold bar of at least 0.9999 fineness, makes them ideal for Asia.

HKEX took advantage of Hong Kong role as a gold trading hub with storage facilities, and the leading offshore RMB center, when it developed the planned physically settled CNH and US$ contracts.

HKEX expects to invite applications from firms interested in serving as liquidity providers in due course.

The London Metal Exchange, a wholly-owned subsidiary of HKEX, plans to introduce gold futures in London in July of this year as part of its LMEprecious initiative. 

Contract Specifications

Contract  US$ Gold Futures CNH Gold Futures
Underlying 1 kilogram gold of not less than 0.9999 fineness, bearing a serial number and identifying stamp of a Recognised Refiner
Contract Size 1 kilogram
Trading Currency USD RMB
Settlement Currency USD RMB
Contract Months Spot Month and the next 11 calendar months
Quote USD per gram RMB per gram
Minimum Fluctuation / Tick Size US$0.01 per gram RMB0.05 per gram
Trading Hours
(Hong Kong Time)
8:30 am to 4:30 pm (day trading session) and 5:15 pm to 1:00 am the next morning (after-hours trading session)
Last Trading Day The third Monday of the Contract Month
Postponed to the next business day if it is a Hong Kong public holiday
Final Settlement Day The second Hong Kong Business Day after the Last Trading Day
Settlement Type Physical settlement

Details of the contract specifications are in a circular on the HKEX website.

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