Gold prices have gone up a lot recently, reaching new all-time highs. This increase has also led to big successes for other metals like copper, silver, platinum, and lithium. The Chicago Mercantile Exchange (CME), which keeps track of these things, released a report about how well metals are doing in the second quarter of 2024.
According to the report, the prices of gold are so high that more people are trading futures contracts for gold than they have in a long time. The volume of trading for Gold futures (GC) and Micro Gold futures (MGC) was the highest it’s been in years during the first quarter of 2024. For example, in March, the average daily volume (ADV) for Gold futures was 332.6K contracts, the highest since July 2020. The open interest (OI), which measures the number of contracts held by traders, was also high, reaching 540.6K contracts on March 13, 2024, the highest since March 2022. Similarly, the ADV for March Micro Gold futures was 75.4K contracts, the highest since December 2020, with an OI of 41.5K contracts on March 21, 2024, the highest since January 2021.
The Chicago Mercantile Exchange (CME) broke its all-time record for daily trading volume when the price of gold went above $2,400 per ounce. On April 12, they traded a record 1,728,362 contracts in their metals market. This beat their previous record set in February 2020.
Jin Hennig, who leads metals at CME, said that because of changes in the world, people are using CME’s metals products to adjust their investments and manage risks.
Gold’s high prices caused a surge in trading for other metals too. On April 12, they had the third-highest trading volume ever for precious metals, the second-highest for metals options, and the second-highest for Micro Gold futures. It was also the third-highest for Micro Silver futures and set a record for Micro Copper futures. Overall, it was a big day for trading in metals.
April 12 was important for another reason. CME, along with the London Metal Exchange, stopped trading Russian metal produced after that day. This was because of sanctions imposed in response to Russia’s actions in Ukraine. This move aimed to make it harder for Russia to make money from metal exports that could fund its military operations.
CME said they are checking how this ban might affect their markets. They also clarified that they don’t reveal where the metal in their markets comes from.
The high demand for precious metals also boosted trading in platinum. In March, trading in platinum reached record levels, with an average of over 42,000 contracts traded per day, including a record day of 60,410 contracts traded on March 19th.
Palladium, a type of metal, had its busiest trading month in February since 2014, with over 8,000 contracts traded each day on average. The number of contracts that traders were holding, called open interest, was also up by 36% compared to the previous year.
Lithium futures, another type of metal traded on the CME, have been doing really well because of the increasing use of green energy. In the first quarter of this year, the amount of trading in lithium hydroxide has already surpassed the total trading volume for the entire previous year. On average, more than 320 contracts are traded each day, which is a huge increase of over 2000% compared to the same time last year. The number of contracts that traders are holding has also gone up a lot, reaching over 24,000 contracts by April 2nd.
