Wednesday, May 18, 2011

Hong Kong Mercantile Exchange Starts Trading Gold, In U.S. Dollars

Although there was some talk about the Hong Kong Mercantile Exchange (HKMEx) trading gold futures in renminbi, the trading got up and running with contracts denominated in greenbacks. Unlike other commodities exchanges, the HKMEx is going to be open for fifteen hours each weekday: 8 AM to 11 PM Hong Kong time, midnight to 3 PM Greenwich Mean Time, or 8 PM to 11 AM Eastern Daylight-Savings Time. The contracts are 32 troy ounces in size.
As of 5:30 p.m. local time, HKMEx gold for August delivery traded at US$1,492.7 a troy ounce. A total of 3,415 contracts were traded, valued at US$163.33 million, the exchange said in a statement....

"With our launch today, we are well on our way to becoming the world's gateway for commodities trading with China," said Albert Helmig, president of the exchange.

Looks like a good start. The exchange's decision to trade in greenbacks confirms the U.S. dollar price as the primary price of gold. Where they came up with 32-ounce contracts, I don't know.

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