CME Group to Launch 1-Ounce Gold Futures to Meet Surging Retail Demand

Rhea-AI Summary

CME Group has announced the launch of 1-Ounce Gold (1OZ) futures contract on January 13, 2025, pending regulatory review. The new contract aims to meet increasing retail demand and will be financially-settled based on the daily settlement price of the global benchmark Gold futures contract.

The announcement comes amid strong performance of CME's existing metals products, with Micro Gold futures reaching record average daily volume of 105,000 contracts and Micro Silver futures hitting 19,000 contracts year-to-date. Multiple industry leaders, including Interactive Brokers, Plus500US, and Phillip Nova, have expressed support for the new product, highlighting its potential to broaden retail access to gold trading and portfolio diversification opportunities.

Positive

• Record trading volumes in Micro Gold futures (105,000 contracts ADV)
• Record trading volumes in Micro Silver futures (19,000 contracts ADV)
• Expansion of product offering to meet growing retail demand
• Strong industry support from major brokers

Negative

• None.

Insights

Financial Markets Expert

This strategic launch of 1-Ounce Gold futures represents a significant market expansion opportunity for CME Group. The timing aligns perfectly with increased retail interest in precious metals trading, as evidenced by the impressive performance of their Micro contracts - 105,000 contracts ADV for Micro Gold and 19,000 for Micro Silver. The financial settlement feature, based on the benchmark Gold futures contract, provides a cost-effective and flexible trading instrument that could attract a substantial new segment of retail traders. This product fills a important gap between Micro contracts and standard futures, potentially driving increased trading volume and revenue for CME. The strong support from major brokers like Interactive Brokers and Plus500US suggests robust distribution channels are already in place.

Market Research Analyst

The retail trading landscape is experiencing a significant transformation, with precious metals gaining traction as a portfolio diversification tool. CME's new 1-Ounce Gold futures product strategically positions the exchange to capture this growing retail demand. The record-breaking performance of their Micro metals products indicates strong market appetite for smaller-sized contracts. This launch could potentially accelerate CME's market share in the retail segment, particularly given the current macroeconomic uncertainties driving interest in gold. The backing from multiple international brokers suggests potential for global adoption, which could significantly impact trading volumes and subsequently, CME's revenue streams.

CHICAGO, Dec. 5, 2024 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, today announced it will launch a 1-Ounce Gold (1OZ) futures contract on January 13, 2025, pending regulatory review.

"Gold has always been a popular investment, but retail interest has surged in recent years as more market participants look to diversify their portfolios," said Jin Hennig, Managing Director and Global Head of Metals at CME Group. "1-Ounce Gold futures will broaden opportunities for a wider range of retail traders, providing even more flexibility to access the liquidity and efficiencies that our futures provide."

"We are pleased to support CME Group's launch and offer clients access to 1-Ounce Gold futures alongside the extensive range of investment products already available on our platform," said Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers. "1-Ounce Gold futures give our clients the ability to transparently manage precious metals exposure while diversifying and protecting their portfolios from political and economic events at a low cost."

"As gold continues to be in high demand, we are pleased that CME Group is expanding their smaller-sized offerings with 1-Ounce Gold futures," said Isaac Cahaha, Plus500US CEO. "This new contract will make it easier than ever for our global customers to capture gold opportunities in a flexible, cost-effective way."

"We welcome the introduction of the smaller 1-ounce gold futures contract, as it opens the door for a broader spectrum of investors to participate in gold trading," said Mr. Teyu Che Chern, CEO of Phillip Nova. "Gold is increasingly viewed by our clients as a key component of a well-diversified portfolio."

CME Group's Micro Gold and Micro Silver futures products are already among some of the fastest growing metals products, reaching record levels of participation this year. Average daily volume (ADV) for Micro Gold futures year-to-date is a record 105,000 contracts, while ADV for Micro Silver futures is a record 19,000 contracts.

1-Ounce Gold futures will be financially-settled based on the daily settlement price of the global benchmark Gold futures contract and will be listed by and subject to the rules of COMEX. For more information, please visit here.

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners. 

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SOURCE CME Group

FAQ

When will CME Group launch its new 1-Ounce Gold futures contract?

CME Group will launch the 1-Ounce Gold futures contract on January 13, 2025, pending regulatory review.

What is the current average daily volume for CME's Micro Gold futures in 2024?

The average daily volume (ADV) for Micro Gold futures is 105,000 contracts, reaching record levels.

How will CME's 1-Ounce Gold futures be settled?

The 1-Ounce Gold futures will be financially-settled based on the daily settlement price of the global benchmark Gold futures contract.

What is the purpose of CME's new 1-Ounce Gold futures contract?

The contract aims to broaden opportunities for retail traders and provide more flexibility to access liquidity and efficiencies in gold futures trading.