Frequently Asked Questions: Gold Kilo Futures

Commonly asked questions:

What is the contract symbol for the Gold Kilo Futures contract?

The contract symbol is GCK.

What are the benefits of this new contract?

» Physically-delivered monthly futures contract with deliveries in Hong Kong at CME Group registered and regulated vaults

» True intraday price and spread transparency across the futures curve, providing spreading and arbitrage opportunities with other world gold markets virtually 24 hours a day

» Accessible on CME Group trading venues: CME Globex, and for submission for clearing through CME ClearPort

» Security and superior financial integrity enabled by straight-through clearing and processing via CME Clearing – the world’s premier clearing house

» Daily mark-to-market of positions and margin offsets against the benchmark CME Group precious metals contracts

What are the contract specifications?

The contract size for the Gold Kilo contract is 1 kilogram or 32.15 troy ounces. The contract is priced in US dollars per troy ounce. The contract will be listed on COMEX and will be available for trading on CME Globex, the COMEX trading floor, and for clearing through CME ClearPort. Contract listings will include the current calendar month, the next two calendar months, and any February, April, June, August, October and December falling within a 12-month period. The active contract months for Gold Kilo Futures will be February, April, June, August and December. Minimum price fluctuation is $0.10 (value per tick is $3.215). Delivery locations will be in the Hong Kong Special Administrative Region.

For more information about the contract specifications, visit www.cmegroup.com/goldkilo.

Why has CME Group launched this new contract?

As physical demand for gold grows rapidly in China and the Far East market and physical bullion moves East, the world increasingly looks at market conditions and price signals in the biggest bullion trading hubs in the region and, in particular, Hong Kong. Gold Kilo futures will provide a cost-effective, liquid price discovery and risk management instrument for the ever more important bullion markets in the Far East and for market participants across the world… in real-time, virtually 24 hours a day.

Our contract is a monthly futures contract which is physically-settled at Exchange-approved facilities in Hong Kong – ensuring that price discovery and convergence are tied directly with the underlying conditions in the Hong Kong and regional bullion cash markets. This new gold benchmark will serve as a valuable price reference to meet the needs of the rapidly expanding Asian bullion markets and allow participants across the world to better manage their regional price risk.

Who can use this contract?

The contract is most relevant to market participants across the globe that have commercial bullion operations in the Far East bullion markets or have price exposure to these markets – and these participants include refiners, distributors, banks, merchant traders, and end users such as jewellery fabricators. Physically settled contracts are a preferred hedging tool by market participants in the precious metals industry. Investors and liquidity providers would also find this contract useful to capture arbitrage opportunities or to manage price exposure.

How do I trade the GCK contract?

GCK will be available to trade on CME Globex and also via CME Direct, CME Group’s free front-end trading platform. CME Globex operates as a Central Limit Order Book (CLOB) that is accessible by market participants virtually 24 hours a day. GCK will also be available for clearing on CME ClearPort for privately negotiated trades, such as Block Trades and Exchange of Physical (EFP) transactions.

What are CME Globex and CME Direct?

The CME Globex platform was the first – and remains among the fastest-global electronic trading systems for futures and options. Through its advanced functionality, high reliability and global connectivity, it is now the world’s premier electronic marketplace for derivatives. To learn more about CME Globex, visit www.cmegroup.com/globex.

Delivered securely across the Internet, CME Direct is a highly configurable trading front end for CME Group markets that offers a complete suite of solutions across the trading lifecycle. To learn more about CME Direct, CME Group’s free trading front end, visit www.cmegroup.com/direct.

What is CME ClearPort?

CME ClearPort is a comprehensive set of flexible clearing services for the over-the-counter (OTC) market. Launched in 2002 to provide centralized clearing services and mitigate risk in the energy marketplace, CME ClearPort today serves as a gateway for a diverse slate of asset class transactions submitted for clearing. With OTC clearing through CME ClearPort, you can continue to negotiate your own prices privately and conduct business off exchange – but you also gain the advantages of increased security, efficiency and confidence.

To register for clearing GCK trades through CME ClearPort, you must establish an account with a COMEX Clearing Member and complete the Exchange User License Agreement (EULA) available at www.cmegroup.com/clearport.

Once you have received your username and password, contact your Clearing Member Firm and request that your clearing account be added to RAV (Risk Allocation Value) Manager. For more information about clearing member firms, please visit www.cmegroup.com/tools-information/clearing-firms.html.

What type of transactions for GCK may be submitted via CME ClearPort?

The eligible GCK transaction types for CME ClearPort submission are privately-negotiated trades including Block Trades and Exchange for Related Position (EFRP) transactions such as Exchange for Physical (EFP) and Exchange for Risk (EFR) transactions.

Further information on GCK Block Trades is provided in GCK Block Trade Fact Card at www.cmegroup.com/goldkilo.

For further details on EFRP transactions, please visit:
www.cmegroup.com/clearing/trading-practices/efp-efr-eoo-trades.html.

How do I find out more about GCK?

For more information on our Metals products, visit cmegroup.com/metals or email metals@cmegroup.com

About CME Group

As the world's leading and most diverse derivatives marketplace, CME Group is where the world comes to manage risk. Comprised of four exchanges - CME, CBOT, NYMEX and COMEX - we offer the widest range of global benchmark products across all major asset classes, helping businesses everywhere mitigate the myriad of risks they face in today's uncertain global economy.

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Gold Kilo Futures (GCK)

Physically-delivered Gold Kilo futures offer a liquid and cost-effective price discovery tool for market participants seeking exposure to gold prices in kilo units.

Learn more about Gold Kilo futures

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