TFEX gold, silver contracts slow dramatically

“Trading on TFEX has been quiet, with only 46,000 contracts traded” on Monday, said Kesara Manchusree, managing director at TFEX. “That compares with almost 60,000 contracts a day for average trading, as the floods have prompted investors to slow down investment and turn to help solve the crisis.
“The exchange plans to discuss with market makers how to handle [the situation] if it is affected by the flood problem.”
On Monday, gold and silver futures recorded only 8,600 contracts, the lowest in three months, which saw average trading of more than 20,000 contracts per day. In August, the exchange saw as many as 96,000 contracts exchange hands because of the volatility of world gold prices at that time.
Kesara said capital markets worldwide were also quiet, prompting investors slow down their activities. The exchange has no plan to raise margins at this time.
On Friday, the gold-futures guarantee increased from Bt92,150 per contract for 50 baht weight of gold to Bt104,500, and from Bt18,430 per contract for 10 baht weight of gold to Bt20,900.
Jitti Tangsithpakdi, president of the Gold Traders Association, said that if Bangkok is flooded, that would affect purchasing power for gold, and the size of impact would depend on how long the situation persisted. In the provinces, the flooding will likely have a greater effect on gold ornaments than on gold bars.
The impact from the floods is only psychological, Jitti said. During this period, gold prices in the world markets have moved in a narrow range, bring a bearish mood to gold futures. Currently, gold prices are adjusted up and down in a range of Bt300-Bt400 per baht weight per day.
Immediate-delivery gold fell US$14.15, or 0.8 per cent, to $1,662.40 an ounce by 10.15am in London, according to Bloomberg. Gold for December delivery was 0.4 per cent lower at $1,663.70 on the Comex in New York. The domestic price for gold bar rose Bt100 to Bt24,400 per baht weight yesterday.
“Even though the gold price is not volatile now as it is in a correction period, it is expected that the price will reach a new high again by the end of this year. Recently, it reached a new high at $1,922 an ounce,” Jitti said.
Kesara said TFEX would offer three new products, oil futures, K-Gold Fund and Bualuang Gold Fund, for the rest of this year. Oil Futures will start trading next Monday. K-Gold Fund, an exchanged-traded fund, will be launched by Kasikorn Asset Management Co, while Bualuang Gold Fund, another ETF, will be offered by Bualuang Asset Management Co.