HKEX News Release 
05/05/2017 
 
 

HKEX Announces Plan for Physically Settled CNH and US$ Gold Futures

 

  • First of their kind gold futures contracts denominated in CNH and US$ and traded on the same platform
  • Physical kilobar (1 kilogram) contract ideal for Asia
  • After-hours as well as day trading (nearly 16 hours of trading per trading day)

 

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.

"Our Offshore Renminbi and US dollar Gold Futures contracts will be the first such pairing on the same exchange platform anywhere in the world," said Li Gang, HKEX's Co-head of Market Development.  "Our new Gold Futures will be helpful to gold users, from refiners and fabricators to jewellers, 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 centre, 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.

 

Ends