Firms continue to develop new ways of trading precious metals such as gold.

Australia-headquartered Allocated Bullion Exchange has held a soft launch of what it says is the world’s first global institutional electronic exchange for allocated physical precious metals, part of a trend in pushing transactions into the digital sphere. The full launch is expected in the third quarter of 2016.

The firm said it breaks fresh ground by offering the full trade cycle in terms of market participants (producers, traders, jewellers and others) and the offering of services from price discovery, trading facilities to storage and delivery.

The exchange has a proprietary and online trading platform called “MetalDesk”. It gives instant electronic global trading, price discovery, and clearing facilities to market participants worldwide.

The launch coincides with a rise in spot gold prices and a spike in volatility in global equities, falling oil prices and fears about decelerating Chinese growth and hence a delay to expected US interest rate rises, among other consequences. Yesterday, the price of spot gold was just under the $1,200 per ounce level, last seen on 22 June (source: BullionVault).

“At a time of high volatility in global markets and resurgent interest in precious metals, the launch of ABX is expanding access, enhancing efficiency and raising transparency in a market that historically has been opaque,” said Tom Coughlin, chief executive.

ABX is a membership-based, institutional exchange, offering trading, storage and delivery services for physical precious metals in one electronic environment. ABX offers its services to precious metal producers, refiners, intermediary broker-dealers, asset managers, institutional and private investors, manufacturers and jewellers.

In May last year, among other industry developments, Gold Bullion International, a precious metals provider to investors and wealth managers, appointed Jammy Chan as head of business development for Asia to spearhead its expansion into China. 

Last June, this publication reported that trading and investing in precious metals such as gold took a decisive move into the 21st century by a partnership agreement in the US that sees metals assigned with a CUSIP identifier for the first time. Gold Frontiers, a US-headquartered software and services company working with family offices and other institutions to invest in precious metals, has partnered with CUSIP, the common language identifier for financial instruments, and Republic Metals Corporation, the refiner, to make it possible for precious metals to be assigned a CUSIP identifier. The partnership created the first gold “Kilobar” that has a unique instrument level CUSIP number attached to it.