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The Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of Thailand group (SET), recommends that investors closely monitor global commodity prices, ensure sufficient margins, and adjust their investment portfolios, especially those investing in gold, silver, or oil futures due to global price fluctuations. TFEX will facilitate the portfolio adjustment by temporary allowing the minimum trading of 1(one) contract for block trade of gold futures during 17-19 April.
TFEX Managing Director Kesara Manchusree said global commodity prices, including those of gold, silver, and crude oil, have been volatile and decreased significantly during the recent Songkran public holiday. On April 17 when TFEX markets re-open, prices of TFEX futures of the related underlying products could drop in the same direction as global derivatives markets of commodity products earlier this week., e.g., on April 15, the COMEX gold futures price was down by over USD140 per troy ounce, or 9.4 percent, its biggest intra-day drop in 30 years. Meanwhile, prices of other commodity products also fluctuated and decreased.
TFEX gold futures had its daily settlement price at THB 21,370 per one baht gold on Friday April 12, where gold price in London’s LBMA (AM) was at USD 1,548 per one troy ounce, and price in New York’s COMEX (April delivery) closed at USD 1,501 per one troy ounce on Friday. Later on Monday April 15, both LBMA and COMEX markets dropped and closed at USD 1,416 and USD 1,360.60 per one troy ounce respectively, while TFEX and Thai Gold Traders Association were closed.
“Due to consistent drop of global commodities prices during long holidays, we may notice that prices of gold, silver, and oil futures have significantly changed over the long weekend, and this may effect investors with net buy position. Thus, investors should closely monitor changing commodity prices, including these three products, ensure sufficient margins and adapt their investment portfolios to match the price volatility of each commodity type” Kesara added.
If prices of TFEX futures including gold, silver, and crude oil change up or down by 10% from the latest settlement price of last Friday, TFEX will halt trading for 30 minutes, helping investors to thoroughly consider all related information, monitor the changing prices of each commodity, and review their trading strategies. In addition, the daily price limit will be expanded to no more than +/- 20% of the latest settlement price.
To help investors easily adapt their investment portfolio, TFEX will adjust the trading practice of block trade of gold futures, by temporary allowing the minimum trading of 1 (one) contract, down from 100 contracts during 17-19 April, for both the morning and afternoon trading sessions.
