SINGAPORE (Commodity Online): Singapore Commodity Exchange (SICOM) will start trading its new Gold Deferred Settlement Contract on 30 March.

According to a press note, the contract’s unique feature is that it is priced as a spot contract with deferred settlement. Deferred settlement occurs when open positions at the end of each trading day are automatically rolled forward using current interest rates.

SICOM said its gold contract allows market participants to gain exposure to the international spot gold price without having to handle any physical delivery of gold.



It also pointed out that market participants can benefit from better risk management and more competitive bid-ask quotes with SICOM as the central counterparty in an open access marketplace.

Trading hours of this contract are from 8.30am to 11pm Singapore time, capturing both the Asian and European trading hours.

The contract will be priced in US dollar per troy ounce and is a spot contract with deferred settlement. The contract is made up of 10 troy ounces of gold with a minimum purchase requirement of 300 lots.

SICOM said the new contract will allow investors to gain exposure to the international spot gold price without having to handle any physical delivery of gold nor payment of the full notional contract value.

The move was part of the plan by SGX, Asia’s second-most valuable listed bourse, to attract new investors and boost its trading volumes.

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