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Launch of new kilobar contract likely to spark gold demand: WGC
Jun 30,2014 09:07CST
industry news
Source:SMM
The launch of exchange-traded gold kilobar contract in Singapore is likely to spark new demand for gold, observed World Gold Council (WGC).
Author: Paul Ploumis27 Jun 2014 Last updated at 08:12:29 GMT
 
NEW DELHI (Scrap Monster): The launch of exchange-traded gold kilobar contract in Singapore is likely to spark new demand for gold, observed World Gold Council (WGC). According to John Mulligan, Investor Relations Manager, WGC, this will allow gold to be traded in a more transparent manner. He added that the launch will help the South-East Asian market to establish its own supply chain.
 
As per WGC, the new contract will provide a price benchmark in the region, as it is operated on the Singapore exchange. The bar in this contract is double the size of a typical 12 kilobar gold bar.The competitively priced kilobars will be traded for three hours during Asian time, before opening of London market. The kilobar contract will trim Asia’s over dependency on gold’s spot price benchmark in London. According to estimates, approximately 70% of the gold that flows into South-East Asia is in kilobar form.
 
According to Mulligan, the launch of the new gold contract would shift the global gold market from west to east. The participation by JP Morgan, Standard Chartered Bank, Standard Merchant Bank (Asia) and the Bank of Nova Scotia will ensure the flow of bars, which in turn will make gold more accessible. The launch will lay foundation for development of gold market in South-East Asian region, Mulligan added.
 
Singapore had announced yesterday, the launch of 25 kilobar gold future contracts which is expected to go live in September this year.
 
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