Peter Zoellner, the new chairman of the London Bullion Market Association (LBMA), has called for the UK to revisit plans for gold futures trading. Despite previous unsuccessful attempts, Zoellner believes that establishing derivatives contracts could enhance liquidity in the global gold market, which sees $35 trillion in annual physical trading. He emphasized that the decision to launch such contracts would ultimately lie with the exchanges.
Currently, gold trading in London is dominated by over-the-counter physical transactions, lacking a dedicated futures market. The London Metal Exchange (LME) had introduced a gold futures contract in 2017, but it was discontinued five years later due to insufficient trading volumes. Zoellner suggests that having multiple locations with robust liquidity could benefit the market.
LBMA Urges UK to Revive Gold Futures Trading
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