By Biman Mukherji
HONG KONG-- CME Group Inc. said Thursday it plans to introduce a
gold futures contract in Hong Kong this year with the aim of
tapping Asian demand for trading in the precious metal.
Each contract will be for one kilogram of gold that will be
physically delivered in Hong Kong.
"This contract will provide a precise risk management tool to
the Hong Kong market. We know that there are customers who want
exposure to what is happening here," said Harriet Hunnable,
executive director of metal products at CME.
Asia accounts for around 70% of global gold demand. Physical
buying of gold has been relatively subdued this year, with buyers
shifting to equities and other higher-yielding assets as the U.S.
economy strengthens.
Earlier in the day, the Shanghai Gold Exchange said it would
launch its international board on Sep. 29 in the financial hub's
new free-trade zone, a widely anticipated move to open China's
tightly controlled gold market to foreign capital.
The board is China's bid to deepen its influence over the global
gold market, where the country is the biggest producer and consumer
but sees itself as lacking clout in pricing.
The exchange is also setting up a warehouse in Shanghai's
free-trade zone that can hold up to 1,000 metric tons of the
precious metal. It is hoping that regional countries, including
those in Southeast Asia, will use the warehouse as a storage
facility for gold trade flows.
Chuin-Wei Yap in Beijing contributed to this article
Write to Biman Mukherji at biman.mukherji@wsj.com
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