(Bloomberg) - Malaysia, the first gold futures contract will begin trading on October 7 to meet investor demand. (According to the head of the country’s derivatives exchange)
Chong Kim Seng, chief executive officer of Bursa Malaysia Derivatives Bhd., said in an interview, gold will carry on being volatile and the 100-gram, ringgit-denominated contract will agree investors to trade devoid of concerns around currency fluctuations. He also said that bullion for delivery up to one year will be cash firm and benchmarked against the London fixing.
Prices fell into a bear market this year after 12 yearly gains, encouraging improved demand from buyers in Asia including China, Indonesia and Thailand. Chong said Malaysia imported 9 billion ringgit ($2.8 billion) of gold in 2012, mostly for processing into jewelry, and exported around 7 billion ringgit of gold jewelry. Gold imports came to 6 billion ringgit in the first half, indicating improved physical demand, he said.
Chong said “The issues that are facing the U.S., the government shutdown and the tapering policy, have an impact on the U.S. dollar and interest rates, so it’s important that people consider gold as part of their portfolio.”
Gold for immediate delivery, was traded at $1,310.74 an ounce at 5:14 p.m. in Kuala Lumpur, has dropped this year on thoughts around the U.S. Federal Reserve will taper stimulus as the largest economy improves and inflation fails to accelerate. Bullion increased 2.2% yesterday and dropped 3.1% on October 1 as the U.S. government’s first shutdown since 17 years.