Why Gold trading in China/Asia has increased 416%

Monday evening the FIA released its annual report on global trends in the trading of futures and options; Gold futures on the Shanghai Futures Exchange saw the biggest increase volume in the last five years as 20.09 million contracts were traded in 2013, an increase of 416% from the 3.9 million contracts traded in 2008.

As a comparison, in North American, Comex gold options traded on the New York Mercantile Exchange came in sixth place in volume growth over the last five years with 10.69 million contracts traded in 2013, an increase of 141% from 2008 when there were 4.39 million contracts.

“China’s commodity futures markets have been growing extremely rapidly in recent years, but 2013 stands out for the large number of new contracts that entered the markets,” the report said.

The association said that one of the reasons for the growth in the Chinese gold contracts was the introduction of “overnight trading,” which allowed domestic investors to trading during European and North American hours.

Also in the the precious metals complex, the association said that 15 kilogram silver contracts traded on the Shanghai exchange were a major winner as its popularity “exploded over the last year.”

“Silver futures, which were listed on the SHFE in May 2012, traded 21.26 million contracts in its first year, then-jumped to 173.22 million in 2013,” the report said.

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