Singapore seeks to launch new gold contracts to challenge the dominance of New York and London

The Singapore Exchange will launch physical gold contracts to challenge the globally dominant gold markets of London and New York.

On May 13, it was reported that the Abaxx Exchange of the Singapore Exchange plans to launch a one-kilogram physical gold contract priced in US dollars, deliverable in Singapore, next month. This will become the only physical gold futures contract at the Asian trading center.

Abaxx CEO Josh Crumb pointed out that the current gold market is "dysfunctional," as the infrastructure of London as a physical trading center and New York as a futures market center can no longer keep pace with the development of gold trading. Crumb believes:

"Asia outside of China needs a gold market that does not rely on New York and London to manage physical gold," and specifically mentioned the "geopolitical" risks from the US and UK.

Asia Needs Its Own Physical Gold Market

Crumb emphasized that establishing a physical gold market in Singapore will help meet the needs of commercial gold users in the region, such as jewelry manufacturers. Crumb stated:

"In Singapore, people feel they are not well served by the existing markets, and the actual physical demand is flowing towards one-kilogram gold bars in Asia."

This year, gold prices have surged strongly, reaching a historic high of $3,500, driven by concerns over economic growth, diversification of the dollar, and strong demand from Chinese and other Asian investors.

Abaxx also hopes to break the tradition of no trading in the gold market over the weekend, ultimately providing 24/7 trading, pending regulatory approval. However, when launched next month, the contract will follow standard gold trading hours, from Sunday evening to Friday evening London time.

Jeff Currie, former head of commodity research at Goldman Sachs and now a board member of Abaxx, believes: "This will be the most versatile contract in the market," adding that especially if trading hours are extended to seven days a week, "you will have options that other contracts do not offer."

Gold will be the fifth contract launched by Abaxx, following contracts for carbon, liquefied natural gas, nickel sulfate, and lithium carbonate, although these contracts have not yet attracted significant trading. However, executives hope that the upcoming physical gold contract will gain traction more quickly due to the high liquidity of the gold market