SGX unveils world's first Shariah-compliant gold futures contract

It launched the first exchange-traded wholesale gold futures in 2014.

Singapore Exchange has recently announced that its Singapore Kilobar Gold Contract has become the world's first Shariah-compliant gold futures.

To recall, SGX launched the world's first exchange-traded, physically delivered wholesale gold futures in October 2014, in partnership with the World Gold Council and the Singapore Bullion Market Association.

"We are excited by the endorsement by renowned Islamic scholars that the SGX physically settled futures contract is a world-first in compliance with the AAOIFI Shariah Standard on Gold. This unlocks a new investment and risk management option for the rapidly growing Islamic finance industry estimated to hold about $2 trillion in assets," Head of metals and bulk commodities at SGX William Chin said.

Chin noted that this would strengthen Singapore's position as an international centre for Islamic finance and would build on SGX vision to develop a global trading hub for gold.

The Singapore Kilobar Gold Contract seeks to serve as a transparent and centralised Asian pricediscovery
platform for the gold market. Globally, about 60% of the precious metal is traded in Asia.