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Gold Futures are prominent in the precious metal and commodity industry, however, with volatility from socioeconomic conditions in 2022, trading gold has been a great test of fundamental and technical analysis.
Generally, in that year it was gathered that factors such as gold demand were on the rise, while interest rates and the Russian-Ukraine Conflict drove gold prices to increase. (More information in 5 Things To Know About Gold Futures).
Following that informative post, this article will feature exclusive research from Orient Futures to assess gold futures prices along with key contract specifications for traders in recent times.
Gold Contracts
Gold is mainly traded from LME, COMEX, SGX, and SHFE. However, apart from the main exchanges, Bursa Malaysia Derivatives relaunched gold futures on 19 September 2022. The Gold Futures (FGLD) were temporarily suspended prior to the June relaunch to undergo a revamp of contract specifications.
Based on news from Bernama, Bursa Malaysia Derivatives had anticipated the Gold Futures FGLD contract to reach 62,000 lots to be traded in 2023 with an average of 250 contracts daily. Additionally, the contract’s removal of any foreign exchange rate adjustment has also allowed investors to gain immediate exposure while diversifying portfolios.
The key changes of the enhanced futures are stated in the following:
BMD Gold Futures Contract
The Gold Futures Contract has the following specifications:
The Gold Futures Contract has a minimum price fluctuation USD 0.1 per contract unit (RM 4.00) with a contract size of 1 contract unit (= the reference price per troy ounce multiplied by the Contract Multiplier). The contract multiplier is 40 per contract unit.
The last trading day will be on the common business day of the spot month both in London and KL.
Contract months are for the spot month followed by the next 3 calendar months. This includes any months from February, April, June, August, October, and December falling within a 12-month period beginning with the spot month
Trading Hours are from Monday to Friday, at these trading hours:
9:00 am – 12:30 am / 2:30 pm – 5:30 pm/ 9:00pm – 11 30 pm (T + 1 Monday to Thursday only).
Figure 1: Source: Bursa Malaysia Derivatives
In the diagram above, Bursa Malaysia Derivative has also demonstrated an example of the calculations of P&L, assuming profitability.
*The P&L is not impacted by the USD/MYR exchange rate. Throughout the entire fund flow, domestic clients do not have to convert from MYR to USD at all.
Gold Price
Gold Futures Contract Prices for COMEX and SHFE
Orient Futures Singapore, Morning Brief
13/03/2023*
Precious metals closed up. COMEX gold contract up 2.08% to closed at $1872,7/oz. SHFE gold active contract up 0.88% to close at 419.7 yuan/gram.
14/03/2023*
Precious metals closed up. COMEX gold contract up 2.77% to close at $1918.9/oz. SHFE gold contract up 1.16% to close at 425.24 yuan/gram.
15/03/2023*
Precious metals mostly closed down, COMEX gold contract down 0.43%, closed at $1908.3/oz. SHFE gold active contract up 0.41% to close at 426.46 yuan/gram.
December’s SHFE Gold Futures Active Contract
In December, gold slipped lower before Fed’s decision to lower interest rates. The SHFE most traded gold futures contract with the expiry in February 2023 edged 1.38% lower from the previous week (December 2, 2022) and closed at 403.46 yuan/gram. The weekly trading volume of the February contract had also recorded a decrease of 17.43% to 520,623 lots with annual turnovers of 210.22 billion yuan.
On the other hand, COMEX gold futures prices settled with gains as US inflation data exceeded market expectations. The gold futures clawed back from losses since early November and data showed that producer prices rose in November by more than forecast.
Overall, the top gainers and losses are recorded in the following:
Figure 2:Source: Orient Futures
Market News
Globally, on CNN business, gold futures were recorded to be at an eight-month high, climbing 14% since late November to hit $1,882 per ounce on Wednesday (Jan 11 2023). Some countries are also beefing up gold reserves to help push up prices, while the value of US dollar weakened making it cheaper for countries outside of the United States to purchase gold.
Similarly, on January 12, Kitco reports that gold prices pushed above $1900.00 and hit seven-month high.
Figure 3: Source: kitco.com
Based on the price graph by kitco, prices are in a two-month-old uptrend on the daily bar chart. Bull’s next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1800,00.
Lastly, peering into the commodities market, SPglobal reports that China steel makers will bring up to 118 million MT/year of new pig iron capacity and 141 million MT/year of new crude steel capacity on stream in 2023 through capacity swap mechanism, nonetheless, China’s steel market may remain under big pressure in the first half of 2023.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG).
We provide premium customer service at an affordable cost to all our clients. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
