The CME Group will launch two gold futures contracts on October 14 this year, pending regulatory approval, in a move that will see it begin to collaborate with the world's largest physical gold exchange, the Shanghai Gold Exchange (SGE).
The two new financially settled contracts will be denominated in US dollars and the offshore Chinese yuan accordingly, with contract sizes currently set at 1kg, United States-based CME said in a press release on Wednesday September 11.
Correspondingly, the US dollar-denominated contract will be priced in troy ounces and the yuan contract in grams, while both contracts will be subject to the rules and regulations of the CME Group's COMEX market.
Meanwhile, SGE will reciprocally launch fixed date T+N contracts denominated in onshore yuan, with the contracts linked to the COMEX gold futures Asia spot prices. These contracts will also take effect on October 14.
CME and SGE signed a bilateral product-licensing agreement in May, with both exchanges planning further collaborations in the gold space.
Derek Sammann, CME Group's senior managing director and global head of commodity and options products, said in a press release: "We are extremely pleased to collaborate with SGE on these contracts that will bring market participants worldwide increased access to the Chinese gold markets."