Intercontinental Exchange has begun offering trading in gold futures in London, debuting precious metals contracts tied to daily auction prices set in the city. The New York Stock Exchange owner also launched contracts on silver, platinum, and palladium. London handles nearly $190bn a day in over-the-counter physical gold trades and holds about $1.4tn in vaults.
Unlike New York, London has not offered a gold futures contract in recent years, with prior attempts failing—the London Metal Exchange closed its contract in 2022 after five years due to low volumes. ICE’s move comes amid geopolitical strain, as traders shipped gold to the US to avoid tariffs following Donald Trump’s trade actions, creating price dislocations. Chris Rhodes, president of ICE Futures Europe, said derivatives should support the physical market, which is centered in London.
Global uncertainty has driven gold to a record price of over $5,500 a troy ounce. Central banks are reassessing storage: the Dutch central bank moved 78 tonnes from New York to London, while France and India repatriated holdings. Average daily gold futures volume in New York at CME Group reached roughly $125bn in the first half of the year.
ICE’s London contracts will be based on its daily physical auctions, clearing through its London arm, which manages Brent oil futures. The contracts run from one day to six months ahead. Major firms like Jane Street, DRW, Goldman Sachs, and Citi participate in ICE’s auction process, which has grown from four to 20 participants since ICE took over the gold benchmark a decade ago.
Source: Financial Times Companies · Summarized by HeadlinesBriefing