ICE brings futures trading to London’s $190 billion-a-day physical gold market
The world’s largest physical gold trading market now has new futures contracts run by the world’s largest precious metals futures exchange.
This week, the Intercontinental Exchange (ICE) – owner of the New York Stock Exchange –launched exchange-traded precious metal futures trading in London. The contracts are directly linked to London's daily gold price auctions, and the exchange has also launched futures contracts for silver, platinum and palladium. The new ICE contracts give market participants an exchange-based means to trade precious metals price exposure from London.
London’s physical gold trading dwarfs that of any other global market, with daily over-the-counter transactions in the area of $190 billion, while the city's vaults hold approximately $1.4 trillion in gold bullion. Unlike New York, which has had well-established gold futures trading, London has not had a major gold futures market in many years despite its dominant position in the physical bullion market.
Previous attempts to establish gold futures trading in London did not last. The London Gold Futures Market was launched in 1982 but shut down only three years later after failing to attract a critical mass of trading activity. Then in 2017, the London Metal Exchange launched their own gold futures, but the contract was eventually discontinued in 2022.
ICE's latest attempt leverages its existing role in London's physical metals market, as the exchange already operates the daily auctions that set the benchmark prices for gold, silver, platinum and palladium.
See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
