NYSE owner launches gold futures trading in London bullion market

Intercontinental Exchange , the owner of the New York Stock Exchange, has launched gold futures trading in London, introducing exchange-traded precious metal contracts in the world's largest physical gold trading market. The exchange began offering gold futures this week, with the contracts linked to London's daily gold price auctions. It has also launched futures contracts for silver, platinum and palladium. London is the world's largest centre for physical gold trading, with daily over-the-counter transactions approaching $190 billion.

The city's vaults hold gold worth about $1.4 trillion. ICE brings futures trading to London's bullion marketFutures contracts allow traders to agree to buy or sell an asset at a set price at a future date. They are used by investors and companies to manage exposure to price movements without necessarily buying or selling the physical asset immediately. The new ICE contracts are linked to London auction prices, which are used as a reference for gold transactions globally.

The contracts give market participants an exchange-based way to trade gold price exposure from London. Unlike New York, which has established gold futures trading, London has not had a major gold futures market in recent years despite its role in physical bullion trading. Also read: Blackstone-backed ASK Alternates raises over ₹500 crore for second private credit fundEarlier attempts failed to gain tractionPrevious efforts to establish gold futures trading in London have struggled.

The London Gold Futures Market, launched in 1982, closed in 1985 after failing to attract sufficient trading activity. The London Metal Exchange later introduced gold and silver futures in 2017, but the gold contract was eventually discontinued in 2022. ICE's latest launch comes alongside its existing role in London's precious metals market. The exchange also operates the daily auctions used to set benchmark prices for gold and silver, as well as platinum and palladium. The launch seeks to give participants in London's physical bullion market another way to trade and manage exposure to movements in precious metal prices.