ICE Launches Gold Futures Contracts in London in a $190 Billion Daily Market
ICE, owner of the NYSE, launches precious metals futures contracts in London directly linked to daily gold price auctions.
Listen to this story
Intercontinental Exchange (ICE), owner of the New York Stock Exchange, launched exchange-traded precious metals futures contracts in London this week, which are directly linked to the city's daily gold price auctions, alongside contracts for silver, platinum, and palladium.
Daily trading volume in London's over-the-counter spot gold market stands at around $190 billion, while the British capital's vaults hold approximately $1.4 trillion in bullion.
ICE owns the New York Stock Exchange, making it a major exchange operator alongside managing the new market, which directly links the new contracts to the daily auction prices on which transaction settlements are based.
The move recalls two previous attempts that did not survive: London's gold futures market launched in 1982 and closed three years later due to low trading volume, while gold futures launched by the London Metal Exchange in 2017 were discontinued in 2022, making the success of the new initiative contingent on attracting sufficient market liquidity.
What Do These Terms Mean?
Futures Contracts: An agreement to buy or sell an asset at a specified price today for delivery at a later date, used for hedging or speculation.
Over-the-Counter Market: Trading conducted directly between two parties without an organized exchange mediating the transaction.
Daily Auction: A specific daily session in which a benchmark price for gold is established based on buy and sell orders.
Bullion: Gold cast into standardized bars and traded as an investment or reserve asset.
Weekly Newsletter
Read between the lines before everyone else. Decode the most important economic, tech, and decision-maker movements in the region.. in 5 minutes every Saturday.
