ICE launches gold futures in London's bullion market
Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, has introduced gold futures trading in London. This move brings exchange-traded precious metal contracts to the world's largest physical gold trading market. The new contracts, launched this week, are linked to London's daily gold price auctions. ICE has also debuted futures for silver, platinum, and palladium.
London handles daily over-the-counter gold transactions worth nearly $190 billion, with vaults holding gold valued at around $1.4 trillion. The new ICE contracts provide traders with an exchange-based method to manage price exposure in London's bullion market. Futures contracts allow investors and companies to agree on buying or selling an asset at a future date without immediate physical exchange.
Previous attempts to establish gold futures in London have faced challenges. The London Gold Futures Market, launched in 1982, closed in 1985 due to low trading activity. The London Metal Exchange introduced gold and silver futures in 2017, but the gold contract was discontinued in 2022. ICE aims to succeed where others have failed, leveraging its existing role in London's precious metals market, including operating daily auctions that set benchmark prices.