I’m sure by now my readers are tired of reading about the Fed and the wonderful job they are doing and listening to which way the price is gold is headed. So I figured I would share a little about a conference I attended last week during Gold week in New York City.
I think it’s important to keep everyone informed of market developments. Hence, I give you LMEprecious, the new London Gold and Silver contract.
LMEprecious is the collaborative initiative created by the London Metal Exchange, the World Gold Council and a group of leading industry players to introduce an innovative, new exchange trading loco London precious metal products.
This new monthly futures contract is expected to launch in the first half of 2017. They claim the LMEprecious futures contract will deliver a choice for market participants,
modernizing the gold and silver markets to better reflect the needs of global players in the precious metals arena.
Working together with key market participants, the platform and open outcry will offer
market participants a choice of using a broker or a platform to execute their trades.
I’m told that 60 percent of the world’s gold activity is conducted in London.
The new contracts will be cleared by LME Clear, the clearing house for the LME. LME Clear currently clears over 600,000 contracts each day, with an annual traded notional value of 12 trillion dollars, equating to 4 billion tonnes of industrial metals.
The lot size for the gold contract will be set at 100 troy ounces and silver set at 5000 troy ounces. Represented minimum purities are .9995 for gold and .999 for silver. All contracts will be for London delivery only.
I’ll take a wait and see attitude on this contract and watch how tight the bids and offers will be and how it compares to the CME contact.
I just wanted to share with you what’s new in the precious metal arena and I hope in the future you will allow me to continue to be your informant, reporting on new developments that affect how we conduct our business every day.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.