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The Tokyo Commodity Exchange Inc. announced today that July 25th will be the start date of new Gold Physical Transaction, pending regulatory approval. Gold is the most actively traded commodity at the Exchange with both futures and options contracts listed.
Simultaneously, TOCOM will introduce a delivery at settlement option for the Gold Rolling Spot contract. Originally a cash-settled contract, the change is expected to better serve investor needs.
Financial markets fell in reaction to the Brexit vote and the world economy is turning increasingly uncertain. Hence, Gold is in greater demand as a safe asset that removes credit risk. It is also seen as an effective inflation hedge and superior for long-term asset protection. Additionally, gold provides portfolio diversification, since price movement tends to uncorrelated with equity and bond prices.
With the launch of this Gold Physical, TOCOM is providing a single platform where investors can conduct spot trading or hedge in gold with transparent pricing. TOCOM is the only regulated exchange that operates a gold market in Japan, and continues to improve investor convenience.
TOCOM plans to expand into OTC and physical commodity markets to create a reliable, “comprehensive commodity market” to better cater to the diverse needs of market participants.
TOCOM Physical Gold Contract Specifications (tentative)
|
Gold Physical Transaction of 100 gram Bars Settled by Delivery at Designated Warehouse |
Physical Transaction of 1 kilogram Bars Settled by Delivery of Warehouse Receipt |
|
|---|---|---|
| Market Division |
Precious Metals Market
|
|
| Listed Commodity |
Gold
|
|
| Type of Trade |
Spot Transaction
(In compliance with Commodity Derivatives Act (Article 2, 10-1-d) ) |
|
| Standard |
Gold of minimum 99.99% fineness |
|
| Price Increment | JPY 1 per gram | |
| Contract Unit | 100 grams | 1 kilogram |
| Method of Trade Execution |
Over the Counter Transaction. |
|
| Notification Period | 10:00-14:30 JST (planned) | |
| Good Delivery Material | 100 gram bars of equivalence of Good Delivery Material for physically delivered futures transactions and that with the trade name or brand and the grade are engraved (TOCOM Good Delivery Bars). | Same as Good Delivery Material for physically delivered futures transactions and that with the trade name or brand and the grade are engraved (TOCOM Good Delivery Bars). |
| Delivery Points | TOCOM’s designation of the approved warehouses in Tokyo | TOCOM approved warehouses in Tokyo |
| Method of Delivery | Delivery by ownership transfer as a result of bailor change at the designated warehouse. | Delivery by the warehouse receipt |
| Publication of Executed Transactions | Every business day on TOCOM website | |
