Bursa's Gold Futures Contract to debut on Monday
KUALA LUMPUR: Malaysia's first precious metal futures contract, the Gold Futures Contract (FGLD) which makes its debut on Bursa Malaysia on Monday, will not only provide retail players the opportunity to invest in gold but also acts as a hedge instrument for local industry players.
Bursa Malaysia Derivatives Bhd Chief Executive Officer Chong Kim Seng said although the product was initially designed for retail investors, interest has been high.
Speaking to reporters after the launch of the FGLD here today, he said with gold experiencing price volatility for the past few months, industry players are looking at instruments that can help in coping with the price turmoil.
"Gold prices will be volatile and increasingly be even more volatile. It can be a bane or boon depending on how well it is approached. Business would need to be more pre-emptive in managing price risks from the increased price volatility," he said.
Today's gold price is RM142,000 per kilogramme (US$1,340 per ounce).
Chong said gold jewellers, manufacturers and stockists are expected to be active users of the FGLD to hedge their gold inventory risks and their forward gold purchases.
The ringgit denominated contract will be traded in small contract sizes of 100 grams, enabling investors to trade in small quantities and making it affordable for investors.
The ringgit denomination minimises the risks associated with foreign currency fluctuations thereby providing convenience and flexibility to trade gold futures on Bursa Malaysia. -- BERNAMA