reuters– Intercontinental Exchange on Monday said it would launch a London gold daily futures contract in February 2017, heating up the race to gain a bigger chunk and increase transparency of a market that is seen as a key global bullion trading centre.
Earlier this year, the London Metal Exchange (LME) said it was planning to launch spot and futures contracts for gold and silver in the first half of 2017.
ICE, which runs the daily London gold auction, said the new daily futures contract would be physically settled, traded in one cent increments and call for the delivery of 100 troy ounces of the metal.
For the gold auction, ICE announced the introduction of central clearing that is planned to go live in March 2017.
“Central clearing during the auction will allow the number of diverse direct participants to continue to grow,” Ruth Crowell, chief executive of the London Bullion Market Association (LBMA), said in a statement.
The London gold auction, which takes place twice daily and sets the benchmark LBMA gold price, currently has 13 authorised participants, up from four last year.
The LBMA, an industry body whose members are mostly banks, refiners and dealers, is holding its annual gathering in Singapore this week.
LME CEO Garry Jones declined to comment on ICE’s move. He said earlier on Monday during a briefing on LME’s own move that “no doubt there will be competing ventures”.
ICE’s plan also comes shortly after the LBMA last week named Cinnober subsidiary Boat as the service provider for its new trade reporting platform, as it moves to boost transparency in the $5-trillion-a-year London gold market.