SGX to lure investors by trading kilobar gold contract starting 13 Oct

It’s a 25kg contract of 99.99 purity.

Singapore Exchange Ltd. (SGX), Southeast Asia’s biggest bourse operator, will start trading a kilobar gold contract next month as it joins other nations in the biggest consuming region in a push for new price benchmarks.

According to Bloomberg, the wholesale contract for 25 kilograms of 99.99 percent purity will start trading at 8:15 a.m. on Oct. 13, according to a joint statement from the exchange, IE Singapore, the World Gold Council and the Singapore Bullion Market Association. The group said in June that trading may begin as soon as September.

The Shanghai Gold Exchange started bullion trading in the city’s free-trade zone on Sept. 18, while CME Group Inc. is planning a physically-delivered futures contract in Hong Kong in the fourth quarter as global demand shifts from the West to the East. Asia accounted for 63 percent of total consumption of gold jewelry, bars and coins last year, with China overtaking India as the biggest buyer, according to the council.

“The launch of the Singapore contract, in addition to what has happened in Shanghai, is a reflection of the importance of Asia to the global gold market,” Albert Cheng, managing director for the Far East at the London-based council, said in an interview today.

Gold for immediate delivery is heading for the first quarterly loss this year as prospects for higher U.S. interest rates reduce the appeal of the metal as a store of value. The metal traded at $1,219.58 an ounce by 4:19 p.m. in Singapore, set for a 8.1 percent decline since the end of June, according to Bloomberg generic pricing.

View the full report here.