.jpg)
The Hong Kong Mercantile Exchange (HKMEx), China’s global marketplace, announces today that it will revise its USD gold futures contract to adopt a minimum fineness of 999.9 for physical delivery.
The move to a minimum delivery fineness of 999.9 – from the 995 standard – will apply to all gold delivery months from April 2013 and onward, effective immediately. Contracts with delivery months prior to April are not affected, and other contract specifications will remain unchanged. A fineness of 999.9 indicates a minimum purity of 99.99% pure gold in every kilo-bar, which is the world’s most widely traded small gold bar. Gold kilo-bars conforming to 999.9 are the most common bar in Hong Kong and much of Asia.
“With the vast majority of physical gold transactions in Hong Kong conducted in kilo-bars of 999.9 purity, this transition further aligns our contracts with the needs of regional market participants and is expected to boost participation and contract volumes,” said William Barkshire, Co-President of HKMEx. “It illustrates our continued commitment to serving as a centre for commodity trading in Asia, as well as a bridge between China and other international financial centres.”
HKMEx Co-President Jane Wang said, “Our updates to HKMEx’s gold delivery specifications were made following extensive and careful market research and consultation with Exchange participants. It will provide users with improved arbitrage opportunities with gold traded on other Asian markets, including Tokyo, Shanghai, and Singapore, helping to further foster the development of commodities trading in the Asia Pacific region.”
Besides gold, HKMEx also trades a 1,000 troy ounces silver futures contract – also in US-dollars and with physical delivery. Going forward, the Exchange plans to launch gold, silver, and copper contracts denominated in renminbi, followed by other products in precious and base metals, as well as energy, agriculture, and commodity indices. The Exchange’s membership includes six clearing members and 28 broking members.
