Comex Trading On Track At Sfe

Sydney Morning Herald

Monday January 15, 1996

By CAROLYN CUMMINS

The surge of interest in gold has coincided with the decision by the Sydney Futures Exchange to rekindle its precious metals contracts through a link with the New York Mercantile Exchange's commodity trading arm, COMEX.

The SFE abandoned its gold contract in 1989 due to a lack of volatility in world gold price and small liquidity among local traders in the futures market.

However, the recent strong demand for bullion, silver and copper and uncertainty among investors as to the potential supply of the commodities prompted the SFE to link up with COMEX.

Australian investors have traded international-based precious metal contracts through COMEX since the late '80s, but it was costly and only available through offshore brokers. The new contracts will be traded simultaneously on the SFE and NYMEX. They will be traded in the same fashion as the West Texas oil products that have been on offer through the SFE and the New York exchange since last September.

The SFE's chief executive, Mr Les Hosking, said the contracts were a natural extension in the range of commodities offered by the Exchange.

"It is estimated that in 1995-96, Australia will receive more than $57 billion in export income from commodities," Mr Hosking said.

"The exchange is developing a commodity platform from which the price risk of commodities can be managed by Australian business."

Gold for February delivery closed at a two-year high of US$400.20 an ounce on the New York Commodity Exchange.