CME Group to launch Options on Micro Gold futures as retail demand increases amid uncertainty
“A wide range of investors believe gold to be a safe-haven asset, especially in periods of volatility and economic and geopolitical uncertainty.”
In a move that reflects the growing appetite for precious metals among retail investors worldwide, CME Group has announced its intention to launch options on Micro Gold futures on October 2, 2023, pending regulatory approval.
This expansion of their product offering signifies a strategic response to increasing demand, providing traders with more opportunities to engage with the gold market.
“A wide range of investors believe gold to be a safe-haven asset”
Gold, often regarded as a safe-haven asset, has attracted a wide range of investors, particularly during periods of economic uncertainty and geopolitical instability. This precious metal has been a go-to choice for those seeking refuge in volatile times, and CME Group aims to cater to this demand by introducing options on Micro Gold futures.
Jin Chang Hennig, Managing Director and Global Head of Metals at CME Group, said: “A wide range of investors believe gold to be a safe-haven asset, especially in periods of volatility and economic and geopolitical uncertainty.”
Hennig also highlighted the recent surge in demand within CME Group’s gold markets, with the average daily volume in Micro Gold futures witnessing a remarkable 40% increase over the past year. Moreover, retail participation in their benchmark Gold futures contract has grown by 17% year-over-year.
30% gold trading occurs during non-U.S. hours
The decision to introduce Micro Gold options aligns with CME Group’s broader strategy to offer diversified and flexible products to cater to traders of all sizes. This move acknowledges the evolving needs of market participants and aims to provide them with enhanced tools to express their views on gold.
CME Group’s history with smaller-sized Gold and Silver futures contracts, which were introduced over a decade ago, reflects the success of such initiatives. Over the last five years, these contracts have experienced significant growth:
Micro Gold futures volume has grown at an average annual rate of 58%.
Micro Silver futures volume has grown at an average annual rate of 93%.
Average daily open interest (ADOI) in Micro Gold futures has grown at an average annual rate of 20%.
Micro Silver futures ADOI has grown at an average annual rate of 36%.
Hennig further noted: “30% of trading volume in our gold markets now occurs during non-U.S. trading hours. With strong interest from the Asia Pacific (APAC) region, our Micro Gold futures volume has increased 34% from last year. This speaks to the global appeal of our markets and the progress we have made in making them more accessible and efficient for a diverse range of participants.”
Options on Micro Gold futures will be listed and regulated by COMEX, further solidifying CME Group’s commitment to providing transparent and well-regulated markets for traders and investors.
As global economic uncertainty persists, this move provides investors and traders with more avenues to manage their portfolios and express their views on gold.