HKEX Announces Plan For Physically Settled CNH And US$ Gold Futures

• First of their kind gold futures contracts denominated in CNH and US$ and traded on the same platform
• Physical kilobar (1 kilogram) contract ideal for Asia
• After-hours as well as day trading (nearly 16 hours of trading per trading day)

Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce physically settled CNH (offshore Renminbi, or RMB) and US dollar (US$) Gold Futures contracts in the third quarter of this year, subject to regulatory approval.

HKEX’s aim is to offer its market participants more choices and to provide more options for investors with offshore RMB.

"Our Offshore Renminbi and US dollar Gold Futures contracts will be the first such pairing on the same exchange platform anywhere in the world," said Li Gang, HKEX's Co-head of Market Development.  "Our new Gold Futures will be helpful to gold users, from refiners and fabricators to jewellers, who need to hedge gold price risk.  We also think they will be attractive to banks, fund managers and traders in the precious metals market.

"The CNH contract will be a valuable addition to our expanding portfolio of Renminbi products.  The contract's synergy with our USD-CNH Futures and other Renminbi derivatives will create arbitrage opportunities."

The underlying asset for HKEX's planned Gold Futures, a 1 kilogram gold bar of at least 0.9999 fineness, makes them ideal for Asia.

HKEX took advantage of Hong Kong role as a gold trading hub with storage facilities, and the leading offshore RMB centre, when it developed the planned physically settled CNH and US$ contracts.

HKEX expects to invite applications from firms interested in serving as liquidity providers in due course.

The London Metal Exchange, a wholly-owned subsidiary of HKEX, plans to introduce gold futures in London in July of this year as part of its LMEprecious initiative. 

Contract Specifications

Details of the contract specifications are in a circular on the HKEX website.