New London Gold and Silver Contract Announced

The Market Gage - Dillon Gage's Precious Metals Newsletter

I’m sure by now my readers are tired of reading about the Fed and the wonderful job they are doing and listening to which way the price is gold is headed. So I figured I would share a little about a conference I attended last week during Gold week in New York City.

I think it’s important to keep everyone informed of market developments. Hence, I give you LMEprecious, the new London Gold and Silver contract.

LMEprecious is the collaborative initiative created by the London Metal Exchange, the World Gold Council and a group of leading industry players to introduce an innovative, new exchange trading loco London precious metal products.

This new monthly futures contract is expected to launch in the first half of 2017. They claim the LMEprecious futures contract will deliver a choice for market participants,
modernizing the gold and silver markets to better reflect the needs of global players in the precious metals arena.

Working together with key market participants, the platform and open outcry will offer
market participants a choice of using a broker or a platform to execute their trades.

I’m told that 60 percent of the world’s gold activity is conducted in London.

The new contracts will be cleared by LME Clear, the clearing house for the LME. LME Clear currently clears over 600,000 contracts each day, with an annual traded notional value of 12 trillion dollars, equating to 4 billion tonnes of industrial metals.

The lot size for the gold contract will be set at 100 troy ounces and silver set at 5000 troy ounces. Represented minimum purities are .9995 for gold and .999 for silver. All contracts will be for London delivery only.

I’ll take a wait and see attitude on this contract and watch how tight the bids and offers will be and how it compares to the CME contact.

I just wanted to share with you what’s new in the precious metal arena and I hope in the future you will allow me to continue to be your informant, reporting on new developments that affect how we conduct our business every day.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.