Record gold prices are driving historic contract volumes across the metals complex – CME Group
Gold’s recent surge to new all-time highs has coincided with historic performances for a wide range of metals contracts, including copper, silver, platinum, and lithium, according to the recently published Q2 2024 Metals Update from Chicago Mercantile Exchange (CME).
The CME wrote that sky-high gold prices drove futures volumes to their highest levels in years during the first quarter of 2024.
“Volume and open interest in Gold futures (GC) and Micro Gold futures (MGC) has surged in response to higher prices,” they said. “March Gold (GC) ADV of 332.6K contracts was its highest since July 2020, while OI of 540.6k on March 13, 2024, was its highest since March 2022. March Micro Gold (MGC) ADV of 75.4K was its highest since December 2020, while OI of 41.5K contracts on March 21, 2024, was its highest since January 2021.”
The CME also set its all-time daily volume record the day gold broke above $2,400 per ounce, with volume in its metals complex reaching a record 1,728,362 contracts on Friday, April 12, breaking the previous record of 1,670,920 contracts set on February 28, 2020.
“Amid shifting geopolitical conditions directly impacting the global metals trade and related sectors, market participants are utilizing our entire suite of metals products to adjust their portfolios and manage risk,” said Jin Hennig, Managing Director and Global Head of Metals at CME Group.
Gold’s standout price performance also drove other metals complex contract volumes to historic highs. April 12 was the third highest volume day on record across the precious metals complex, with 1,461,859 total contracts traded, the second highest for metals options, with 305,732 contracts traded, the second highest volume day on record for Micro Gold futures, with 311,919, and the third highest for Micro Silver futures, with 58,485 contracts traded.
It also saw the single day volume record for Micro Copper futures with 16,597, and was a top-ten volume day for the base metals complex with 265,021 total contracts changing hands.
April 12 was a momentous day for other reasons, as the CME, in coordination with the London Metal Exchange, enacted the most comprehensive limitation on Russian exports to date: a ban on all Russian metal produced after that day. The move was made to bring the two exchanges into compliance with the latest U.S. and UK sanctions imposed in response to Russia's invasion of Ukraine.
The ban was put in place to hamper Russia’s ability to profit from the export of metal produced by companies such as Rusal (aluminum) and Nornickel (nickel) which help the country fund its ongoing military operations in Ukraine.
The CME told Reuters that they “are reviewing and will communicate any impact to our markets,” adding that they “do not disclose the origin or brands of the eligible or registered metal we have in store and that is consistent across all of our physically delivered markets.”
The red-hot precious metals market has also driven platinum contracts on the CME to record volume levels. “For the first time since 2018 platinum and palladium prices are near parity,” they said.“Platinum volumes reached record levels in March trading over 42K contracts on average per day, including an all-time high day of 60,410 contracts on March 19.”
“Palladium (PA) saw average daily volume in February of over 8K contracts, its highest since February 2014, while YTD average open interest of 21.6K is up 36% vs. 15.8K in 2023,” they noted.
Lithium futures on the CME have also benefitted from the ongoing green energy transition. “Q1 trading volumes in lithium hydroxide has already eclipsed the volume for the entire year last year,” they said. “Over 320 contracts have traded per day on average in Q1, up over 2000% compared to the same period last year. Open interest has surged to over 24K contracts as of April 2.”
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