Hong Kong Exchanges and Clearing (0388) is to relaunch gold futures in the next few months after listing two gold funds on the bourse, said Joseph Chan Ho-lim, acting Secretary for Financial Services and the Treasury.
The exchange will optimize contract design and improve the delivery mechanism on the futures relaunch, Chan told a LegCo meeting on Monday.
Details will be announced by HKEX in due course, he said.
Speaking at the same meeting, HKEX head of markets Gregory Yu Hock-ken said the exchange is consulting market participants and stakeholders on the relaunch, and will strengthen investor education on the matter.
Chan said the preparatory work for the operation of a central clearing system for gold in Hong Kong has entered its final stage, with trial operation scheduled to commence within this year.
The government has established the Hong Kong Precious Metals Central Clearing Company to formulate the framework and rules of the clearing system to ensure that market views are fully incorporated, he said.
Against a backdrop of heightened geopolitical uncertainties, persistent inflationary pressures, and restructuring of the international monetary system, the strategic importance of gold has become even more pronounced, presenting opportunities for Hong Kong to develop financial trading of gold, Chan said.
The acting Secretary said the government will encourage gold traders to establish or expand refineries in the city and several enterprises that are qualified to refine gold to international standards have already expressed interest in doing so.
The government will also leverage the experience gained from developing the gold trading market to develop other commodity markets to further construct a commodity trading ecosystem, including supporting the industry in establishing more approved warehouses, he said.
All 15 London Metal Exchange-approved warehouses in Hong Kong have commenced operations, storing around 24 000 tonnes of non-ferrous metals as of March, he added.
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