Will it be third time lucky for gold futures trading in Hong Kong?

Will it be a case of third time lucky as Hong Kong Exchanges and Clearing attempts once again to launch gold futures on Monday?

There is certainly a sense of optimism among traders this time around, as the new products offer physical delivery and favourable trading times.

Seen as the latest move by the local bourse to diversify its income sources and products, HKEX chief executive Charles Li Xiaojia will host a ceremony for the launch of two new gold futures products – one in US dollars the other in yuan – with physical delivery.

“I believe HKEX will be successful in launching the gold futures this time as it has physical delivery of the products, which will attract gold jewellery manufacturers and users to trade. The previous gold futures traded at the exchange did not have physical delivery, which was why there were such little trading,” said Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society (CGSE), which trades spot gold in taels, a weight fixed in China at 50 grams.

Cheung does not consider HKEX as a competitor.

“HKEX and the Chinese Gold & Silver Exchange Society are partners and not competitors. We have signed a memorandum of understanding for us to co-operate with each others in gold trading,” Cheung said.

In an interview with the South China Morning Post, Cheung said HKEX would consider using the local gold bourse’s gold vault and other facilities for physical delivery. The 170 members of the CGSE would like to use the HKEX products for hedging their investments.

“The gold market is very active nowadays and we can have more than one market to trade gold. What is more important is to have the right products for the investors to trade,” he added.