17 July 2017
The London Metal Exchange (LME) gold and silver contracts saw volumes surge in their first week of trading. LME Gold traded a total of 25,590 lots (2.6 million ozt / 79.6 tonnes) while 2,556 lots (12.8 million ozt / 397.5 tonnes) of LME Silver were transacted. LME Gold and Silver open interest also reached 9,380 lots and 2,253 lots respectively.
Liquid spot order books for both contracts were available from launch with bid/offer spreads as tight as USD 0.20 for gold and USD 0.01 for silver, and carries quoted in depth out to five years forward. The provision of implied pricing means tradeable outright monthly futures are visible on screen along with a real-time transparent forward curve out to five years.
Kate Eged, Head of Precious Metals at the LME, commented: “This promising start for our gold and silver contracts is indicative of the strength of industry support for LMEprecious, which was designed to provide a solution for the London market faced with challenges such as ongoing regulatory change, increased regulatory capital and transparency requirements, and the overall push for modernisation.”
Robin Martin, Managing Director, Market Infrastructure at the World Gold Council commented: “The uptake of LMEprecious in the first week has been highly encouraging and demonstrates the market’s appetite for a comprehensive exchange-traded offering to complement the London OTC market. We have firmly backed the vision behind LMEprecious from the outset, confident that this industry supported solution will help the wholesale gold market evolve in the interest of all its participants”.
LMEprecious – developed by the LME, the World Gold Council and six leading industry participants – introduced a suite of exchange-traded and centrally cleared precious metals products to the London market on 10 July 2017. It comprises spot, daily and monthly futures contracts for gold and silver.