Precious metals contracts
ABOUT CONTRACTS
Moscow Exchange provides an access to the market of precious metals. The Derivatives Market has futures and options on a number of precious metals – gold, silver, platinum and palladium. Moreover, we have also deliverable futures (deliverable gold and silver) which imply physical delivery of an asset upon expiration of the contract.
The derivatives market is the best way to trade precious metals at world prices, available and convenient alternative to traditional investments, such as investments in bullions, coins, shares of mining companies and depersonalized metal accounts. The contracts are cash-settled, the settlements are based on London fixings. The strike price for gold, platinum, palladium futures is determined based on the morning fixing, and the strike price for silver futures is determined at the midday fixing.
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Fixing peculiarities
The precious metals price on gold and silver markets is set at London fixing by five market makers (Bank of Nova Scotia – Scotia Mocatta, Barclays Bank Plc, Deutsche Bank AG, HSBC Bank USA, NA and Societe Generale) twice a day in weekdays. The time of price fixing ranges from several minutes to several hours, depending on the current market situation. On the gold market, the first fixing starts at 10.30, the second at 15.00 GMT (13.30 and 18.00 Moscow time respectively). Silver fixing takes place only once a day at 12.00 GMT (15.00 Moscow time). The fixing procedure is based on the customers orders, and as they are met, the average value of these quotes is fixed. The first silver fixing was made in 1897, gold fixing – in 1919. A troy ounce (1 toz = 31.1 g) was chosen as a unit of measurement and the quotation was in US dollars.
With platinum and palladium metals fixing is effected on the London Platinum & Palladium Market twice a day at 9:45 and 14:00 GMT (12:45 and 17:00 Moscow time) in weekdays. Among the companies which participate in the fixing there are Barclays Capital, Credit Suisse, Deutsche Bank AG, Engelhard Metals Limited, Goldman Sachs International, HSBC USA London Branch, Johnson Matthey PLC, JP Morgan Chase Bank, Mitsui & Co Precious Metals Inc (London Branch), Standard Bank PLC, UBS AG. The first fixing of platinum and palladium prices was made in 1989. As the unit of measure they chose also 1 troy ounce (1 toz = 31.1 g), and the quotation was set in US dollars, euros and British pounds.