By Rhod Mackenzie
The volume of trading in settled futures for gold in rubles exceeded 3.6 billion from the date of their start on June 28 , the press service of the Moscow Exchange reported. The market calls the indicator good: the new instrument is already outperforming, for example, trading volumes in palladium futures . Gold is a protective asset, and investing in it on the exchange allows you to avoid storage costs, for example, with bullion. What is the peculiarity of the new financial product and how it can protect against the weakening of the ruble
Golden calculation
On August 4, on the Moscow Exchange, the volume of trading in settled futures for gold in rubles exceeded 3.6 billion rubles from the date of the launch of this instrument. It was launched on June 28, 2023.
Contracts with expiration in September and December 2023, as well as in March and June 2024 are admitted to trading. As Maria Patrikeeva, Head of the Derivatives Market of the Moscow Exchange, noted earlier, gold is traditionally included in the top 5 popular derivatives market instruments with an average daily volume of transactions of more than 25 billion rubles .
On July 11, trading in perpetual settlement futures for gold (one-day contracts with daily automatic extension for one day) began on the site. Prior to this, it was already possible to buy a similar instrument on the stock exchange, but denominated in dollars.
As of the end of July, the volume of trading in gold futures in rubles was 2.5 billion. Based on these data, about 100 million worth of purchases and sales were made per day , said Valery Yemelyanov, an expert on the stock market at BCS World Investments. This is already more than the amount of palladium futures (usually no more than 100 million per session), but less than in platinum (200-300 million per day), the expert cited examples.
The convenience of the new tool is that it is not tied to the London Stock Exchange or the CME, that is, it is actually independent of external providers and acts as "purely Russian know-how," he added.
Alexander Tsyganov, director of the investment and corporate business department at Tsifra Broker, also called the current indicator a good one. Previously, it was difficult to imagine that there would be such volumes in the presence of a gold futures in dollars, he said.
The result is impressive, given the overall decline in the purchase and sale of instruments on the Moscow Exchange since the spring of 2022 , Andrey Maslov, an analyst at FG Finam, also noted. For residents of the Russian Federation, the ruble remains the preferred currency. The liquidity of the dollar in terms of operations on the stock exchange has significantly decreased due to both the actions of the Central Bank and the macroeconomic situation, he explained.
— At the same time, gold is the most important protective instrument, which is simply necessary for most balanced portfolios . Compared to the physical precious metal, futures do not require logistics and storage costs, and gold can lose value due to improper storage conditions,” Andrey Maslov said.
On August 4, the December futures for gold cost $1.9 thousand per ounce . At this level, it has been holding for several months, showing minor fluctuations. The average price of gold in 2022 was $1.8 per ounce.
Albert Koroev, Head of the Stock Market Analytics Department at BCS Mir Investments, earlier predicted a further increase in the price of gold to $2.2 thousand per ounce by the end of the year against the background of high inflation in the world and tightening of monetary policy by various countries. Izvestia sent a request to the Central Bank.
De-dollarization trend
Trends in favor of increasing demand are not yet visible, said Valery Yemelyanov. However, with the increasing de-dollarization of the Russian economy, gold futures will gain popularity, and trading volumes will grow , Alexander Tsyganov argued.
In the context of the gradual weakening of the ruble, futures for the main precious metal can be a good help, and, on the contrary, if the ruble strengthens, it will lose its attractiveness, Andrey Maslov said.
At the same time, gold is almost always required in the portfolio to balance risks, so it is less dependent on short-term volatile market sentiment, he concluded.
Exchange prices for precious metals are not as volatile as for oil, gas or agricultural products, which means that the risks of trading these futures are somewhat less than for raw materials, according to a leading analyst at Freedom Finance Global. The disadvantages are related to the fact that this is a ruble instrument, respectively, investments in it are subject to inflation, she said.
In addition, the risks of investing in a futures contract are much higher than, for example, buying shares of Russian issuers , Natalya Milchakova believes.
Earlier, it was noted that the interest of Russians in investing in complex instruments related to gold has grown dramatically. In the first quarter of 2023, the average monthly volume of transactions in futures and options for this precious metal increased by 88% compared to the same period last year.
This article orginally appeared in Russian at iz.ru