Asia, which accounts for 60 per cent of the world gold imports, has overtaken the US in gold futures trading, with Mumbai and Shanghai exchanges growing rapidly, leading trade magazine Futures Industry has reported.
According to the latest edition of the US-based magazine, data from the first eight months of this year show that the combined volumes in gold futures trading at exchanges in Shanghai, Tokyo, Taiwan and Mumbai reached 49.8 million contracts, far ahead of the 34.3 million contracts traded in the US.
"From January through August this year, seven of the top 10 gold contracts in the world were Asian," it said, adding that much of that growth was in Mumbai and Shanghai.
Volume on Shanghai was 17,831,455 contracts, while on Multi-Commodity Exchange (MCX) in Mumbai it was 13,709,106 contracts and on Tokyo 10,840,658 contracts.
"Some of the boom is undoubtedly driven by the search for a safe haven as the value of stock investments continues to evaporate," the magazine said noting that Asian investors may also have a greater cultural predisposition toward gold than Westerners.
Highlighting the growth story of gold futures in Asian exchange, it said that the Tokyo Commodity Exchange, the longest established of the group, is making a great progress with mini-sized contract and has thrown the doors open to international players.
"MCX can tap the enormous Indian market. MCX's gold and gold mini contracts each have more than doubled in size over the last year, while interest in the gold contracts offered by its local rival, NCDEX, has been sliding downwards," it said, adding that India is also rapidly becoming home to some of gold's busiest futures contracts.
The Taiwan Futures Exchange is also doing well by matching the contract specifications to local preference.
Even the Hong Kong Exchange, the newest to enter the market, would seem to have an advantage as a bridge for arbitrage between Shanghai market and the rest of the world, it said.
While projecting gold outlook for next year, the magazine said, "So, 2009 may well see all of these exchanges thriving in their respective markets, and Asia as a whole become even more of a major center for the global trade in gold."
Asia imports 60 per cent of the world's gold and its exports 40 per cent. India is the largest consumer of physical gold in the world, followed by the US, and then China. And this year, China became the world's largest gold producer – a title south Africa had held for more than 100 years.