Chicago Mercantile Exchange Kicks Off First Shanghai-Priced Gold Futures
Dou Shicong
DATE:  Oct 14 2019
/ SOURCE:  yicai
Chicago Mercantile Exchange Kicks Off First Shanghai-Priced Gold Futures Chicago Mercantile Exchange Kicks Off First Shanghai-Priced Gold Futures

(Yicai Global) Oct. 14 -- The Chicago Mercantile Exchange and the Shanghai Gold Exchange have today launched gold futures with pricing based on each other's benchmarks to increase liquidity, marking the CME's first tie-up with a Chinese bourse.

The CME listed two contracts, one for the yuan and one for the US dollar, as scheduled on the COMEX, a division of the New York Mercantile Exchange, the China Securities Journal reported. Both of these contracts will be settled using the Shanghai Gold Exchange Gold Benchmark PM Price. The CME will be using the EBS CNH Benchmark at 3 p.m. Beijing time for US dollar conversions.

The SGE matched the event by launching new T+N contracts -- NYAuTN contracts -- today. The yuan-denominated futures products will be linked to COMEX Gold Futures Asia Spot Prices. The sizes will be 100 grams.

In May, the two bourses reached an agreement about the linked contracts, seeking to widen foreign investors' access to the gold market of China, the world's largest producer and consumer of the precious metal, and vice versa. 

The physical gold market has undergone a major shift in the past two years as demand has shifted from the West to the world's eastern parts, Youngjin Chang, CME's global head of metals products, told the same news source.

The partnership is a rare opportunity to link up SGE's gold spot market with CME's COMEX Gold futures and it's a win-win situation, Chang added.

Editor: Emmi Laine 

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Keywords:   CME Group,Shanghai Gold Exchange,Gold Futures