In a strategic response to the increasing demand for precious metals, CME Group announced its plans to launch options on Micro Gold futures on October 2, 2023, pending regulatory approval. This move is seen as an effort to provide traders with more opportunities to engage with the gold market, which has seen a surge in interest from a wide range of investors due to its reputation as a safe-haven asset during periods of economic and geopolitical uncertainty.
Jin Chang Hennig, Managing Director and Global Head of Metals at CME Group, noted that the average daily volume in Micro Gold futures has witnessed a significant 40% increase over the past year. Retail participation in their benchmark Gold futures contract also grew by 17% year-over-year. According to Hennig, "30% of trading volume in our gold markets now occurs during non-U.S. trading hours," highlighting the global appeal of their markets.
CME Group's (NASDAQ:CME) history with smaller-sized Gold and Silver futures contracts, introduced over a decade ago, reflects the success of such initiatives. Over the last five years, Micro Gold futures volume has grown at an average annual rate of 58%, while Micro Silver futures volume has grown at an average annual rate of 93%. Average daily open interest (ADOI) in Micro Gold futures has grown at an average annual rate of 20%, with Micro Silver futures ADOI growing at an average annual rate of 36%.
The introduction of Micro Gold options aligns with CME Group’s broader strategy to offer diversified and flexible products to cater to traders of all sizes. The company recognizes the evolving needs of market participants and aims to provide them with enhanced tools to express their views on gold.
Options on Micro Gold futures will be listed and regulated by COMEX, further solidifying CME Group’s commitment to providing transparent and well-regulated markets for traders and investors. As global economic uncertainty persists, this move is expected to provide investors and traders with more avenues to manage their portfolios and express their views on gold.
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