ICE Launches Precious Metals Futures in London

ICE has launched precious metals futures trading in London, introducing contracts for gold, silver, platinum, and palladium. These new derivatives are tied to the daily auction prices ICE manages in the city, a global hub for physical bullion transactions. London handles over $190 billion in over-the-counter gold trades daily and stores around $1.4 trillion in bullion reserves, making it a critical center for precious metals.

The move comes as London has struggled to sustain a successful gold futures market in recent years. The London Metal Exchange closed its gold futures contract in 2022 due to low trading volumes, and an earlier effort in the mid-1980s also failed. However, recent geopolitical shifts, including trade tensions and economic sanctions, have altered global precious metals markets. In April 2025, trade actions led to significant gold movements to America as futures prices in New York surpassed physical prices in London.

ICE Futures Europe president Chris Rhodes highlighted the role of derivatives in supporting the physical market. 'Derivatives markets generally are there to support the physical market,' he said. 'The physical market is in London. We believe that if you were to enable people to manage their risk in a different way... that could be an attractive prospect, particularly if it’s linked into the auction price.'

Central banks are also re-evaluating their gold storage strategies. Last month, the Dutch central bank relocated over 78 tonnes of gold from New York to London, citing geopolitical unrest. Meanwhile, Hong Kong and Singapore are expanding storage facilities, and France and India have repatriated gold. Venezuela is working to transfer $4 billion in disputed reserves from the Bank of England to New York. Gold prices reached a record high above $5,500 per troy ounce in January, with CME Group’s gold futures contract averaging $125 billion in daily volume during the first half of the year.

ICE’s London contracts will settle against its physical auction prices and offer durations from same-day to six months. Clearing will be handled through ICE’s London division, which also operates Brent crude oil futures. Since acquiring the gold benchmark a decade ago, ICE’s auction has grown from four to 20 participants, including major firms like Jane Street, DRW, Goldman Sachs, and Citi. Daily auction volumes have surpassed 424,000 ounces, reflecting a 30% increase since 2015.