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LBMA, CME See Unprecedented Record Trading Volume In Gold Market In June

Kitco News

(Kitco News) - June saw gold’s best price gains in three years as prices pushed above $1,400 for the first time in six years, and trade data shows that those gains were the result of unprecedented trading activity.

On Tuesday, the London Bullion Association said that more than 227 million ounces of gold were traded in over-the-counter markets during the week of June 23. The trading activity compares the overall weekly average since November of 151 million ounces.

For the month from June 6 to July 7, the LBMA data shows that more than 789 million ounces of gold were traded in OTC markets.

However, the LBMA isn’t the only organization that is reporting record trade data. Last week the CME said that the daily volume for June gold options increased to 105,000 contracts, up 134% compared to 2018. The exchange’s weekly gold options also saw record daily average volume of 9,500 contracts, up 450% from last year.

“Gold options volume on June 20 was 199,579 contracts, ranking as the second highest volume day in complex history,” the CME said.

Along with the trade data, the gold market saw unprecedented investor demand. Tuesday, the World Gold Council said that gold holdings in global gold-backed exchange traded funds rose by 127 tonnes last month to 2,548 tonnes.

June saw gold prices rise nearly 10% during the month, hitting a six-year high at $1,442.90 an ounce. Analysts noted that investors jumped back into gold as rising recession fears caused investors to aggressively price in looser Federal Reserve monetary policy.

The CME FedWatch Tool showed that last month investors were looking for the U.S. central bank to cut interest rates by 50 basis points in July. The gold price has fallen from its recent highs as market expectations have shifted to a 25 basis-point cut.

August gold futures last traded at $1,399.90 an ounce, relatively unchanged on the day.

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