Traders have been flocking to gold amid rising expectations the Federal Reserve will embark on a rate-cutting cycle quickly. The steel is also seen as a haven with ongoing geopolitical issues from the Center East, Russia’s warfare in Ukraine and the upcoming US presidential election. And a must diversify away from the US greenback reserve system by world central banks additionally has helped increase the steel.
The strong development in micro gold futures comes with bullion rallying about 25% this 12 months, repeatedly hitting report highs. Spot gold hit $2,572.98 an oz. on Friday, its highest ever.
Retail demand “tends to have excessive correlations with the worth motion of” gold, particularly when it’s in an uptrend, Jin Hennig, world head of metals at CME Group, mentioned in an interview. “We’ve seen that beginning late final 12 months all the way in which into this 12 months.”
CME’s micro gold futures contract was launched in October 2010 with an goal to focus on retail traders. It’s one-tenth the scale of CME’s benchmark gold futures contract.
(By Yvonne Yue Li)