Thailand Futures Exchange (TFEX) plans to allow Gold-D features to be delivered on a daily basis, from contract expiry, aiming to improve the product's trading volume.
Physical delivery on a daily basis is expected next year, said Rinjai Chaiyasut, president of TFEX.
After more than a year as a service, Gold-D's trading volume has been anaemic because of the complicated trading process, pricing calculations, physical delivery, and the collection of the value-added tax (VAT) and withholding tax, she said.
Gold-D is a physical settlement of gold futures contracts based on gold bars with 99.99% purity. Physical delivery is required upon contract expiry, with the contracts being quoted in US dollars but settled in baht.
TFEX unveiled gold online futures trading yesterday to help investors make real-time choices based on the global gold market and mitigate risks.
"The product is expected to gain popularity as it is easy to trade and there are four market makers to support the product's trading liquidity," said Ms Rinjai.
The four market makers are MTS Gold Futures, Classic Ausiris Investment Advisory Securities, YLG Bullion and Futures, and Hua Seng Heng Gold Futures.
Gold online futures is the latest gold futures product, in addition to 10-baht and 50-baht gold futures.
As of Nov 2, the total trading volume of 10-baht and 50-baht gold futures products stood at 3.83 million contracts, up from 3.69 million contracts in 2017. Daily average trading volume rose to 18,489 contracts from 15,130 in 2017.
Gold futures' turnover this year increased by around 20%, driven by wild swings in gold prices and growing investor recognition of the product, she said. The precious metal is recognised as an asset class for investment diversification, helping with sales of the paper gold product, said Ms Rinjai.
Jitti Tangsitpakdee, president of the Gold Traders Association, said gold online futures would attract investors to trade and speculate on gold prices in the local market rather than overseas markets.
Global gold prices will move in a tight range of US$1,205-1,245 per ounce, with higher prices if Republicans fail to tighten their grip on the imminent US midterm election, he said.
Domestic gold prices are expected to increase by 1,000 baht per baht weight of gold from October to 18,500-19,500 baht because of the baht's weakness, said Mr Jitti.
Kritcharat Hirunyasiri, chairman of MTS Gold, estimates gold prices will move sideways at $1,200-1,255 per ounce and hit $1,300 if the US policy rate is raised in December.
"Over the past two years, gold prices rose for three months after the US rate hike and we expect to see the same movement [if the US rate increases in December]. Moreover, if the US-China trade tension recedes, the US dollar will become weaker and be a boon for gold prices," he said.
