(Kitco News) –The CME Group has launched a smaller version of its gold futures contracts, one that allows market participants to trade a contract that is a fraction of the size of a full-sized offering, the exchange said in a news release Thursday.

The new contract is called the E-micro gold futures and will be one-tenth the size of the full 100 ounce gold futures benchmark contract. The contracts will begin trading on Oct. 3 for the Oct. 4 trade date.

"Customers have expressed specific interest in trading a smaller gold contract because it provides a more economical approach for trading gold futures and it gives them more flexibility to execute a variety of trading strategies over varying time periods," said Joe Raia, CME Group managing director of energy products and services.

Raja added “that more active market participants can use these as a more efficient way to adjust positions or create delta adjustments to trading strategies.” When the e-micro gold contract is taken into delivery, market participants receive an accumulated certificate of exchange or 10% ownership in a 100-oz gold bar held in the form of a Comex gold warrant. Over time the accumulated certificates can be taken in a 100 ounce Comex depository receipt. However, an individual cannot take ownership or delivery of a 10 ounce gold bar through the e-micro gold futures contract.

Gold prices have rallied to near all-time nominal highs lately, with prices for a full futures contract recently have traded as high as $1,260.

Contracts will cover a 24-month time frame and include February, April, June, August, October and December.

For more information, please go to www.cmegroup.com/emicrogold.

By Cecylia Tulikowski-Denison of Kitco News ctulikowski@kitco.com

Editor’s Note: Meet the Kitco News Team at the upcoming Kitco Metals eConference September 12-13, 2010. A not-to-be missed event featuring Ron Paul, Marc Faber and other industry heavyweights. The eConference is free with Pre- Registration www.kitcoeconf.com.

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