ICE started offering daily gold futures this week that match London's 100-ounce bar format used in spot trading. Alongside gold, it launched daily contracts for silver, platinum, and palladium. ICE also oversees the daily auctions that determine London's bullion benchmarks, and it introduced associated futures contracts in 2016.
The push aims to grow exchange trading in a London market that has long relied on OTC transactions and spot deals, with influence concentrated among a few global lenders and intermediaries. JPMorgan Chase & Co. and HSBC Holdings Plc are among the heavyweights. Critics have called the setup relatively opaque with steep hurdles for newcomers. Meanwhile, exchange-traded gold futures have long been established in New York and Shanghai.
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Building a futures-led alternative has been tough. Back in 2017, the London Metal Exchange introduced gold contracts with backing from prominent firms such as Goldman Sachs Group Inc. and Societe Generale SA. After an early burst of activity, volumes steadily faded and the LME contracts were scrapped in 2022.
ICE also launched associated futures contracts in 2016, and CME Group Inc. introduced a contract in 2020 tailored to London's 100-ounce bars, which are popular with large institutions and investors. Both efforts struggled to build lasting participation.
If more activity migrates from spot and OTC into exchange-traded futures, liquidity could start to pool in different places and access might look more straightforward for some investors. The key tell will be whether these new contracts build steady volume over time.
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