Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Singapore-based start-up Abaxx Exchange is seeking to challenge the dominance of London and New York in the global bullion market with the launch of a new physical gold contract, following a blistering price rally this year.
The bourse, which has raised more than $100mn from investors including BlackRock and CBOE Global Markets, plans to offer a physical one kilo gold contract next month, denominated in US dollars and deliverable in Singapore.
Chief executive Josh Crumb described the structure of the gold market — in which London is the centre of physical trading and New York the centre of the futures market — as “dysfunctional” because infrastructure has not kept pace with how it is traded.
“Our view is that Asia ex-China needs a gold market, to manage the physical gold, that is not reliant on New York and London,” said Crumb, pointing to “geopolitical” risks in the US and UK.
Building a physical gold market in Singapore would help meet the needs of commercial gold users such as jewellery manufacturers in the region, added Crumb.
“In Singapore, people feel like they are not well served by the existing market,” said Crumb. “The actual real physical demand is kilo bars going into Asia.”
The blistering bullion rally this year has seen prices repeatedly hit record highs, propelled by concerns about economic growth, diversification away from the US dollar and strong demand from Chinese and other Asian investors.
Abaxx’s contract will be the only physical gold futures contract in the Asian trading hub.
“We have the potential to compete with London, but we need the infrastructure to bring in more flows and the physical gold contract can help with that,” said Albert Cheng, head of the Singapore Bullion Market Association.
Abaxx also hopes eventually to disrupt a cherished tradition in the bullion market — the weekend — by eventually offering 24/7 trading, if regulators grant approval. At launch next month, the contract will adhere to standard bullion trading hours, which stretch from Sunday evening London time to Friday evening.
The bourse is majority owned by Toronto-listed software group Abaxx Technologies, which has a market capitalisation of about $235mn and is aiming to reach break-even during 2026, according to Crumb.
Gold will be the fifth contract launched by Abaxx, which debuted its first last year. Its existing contracts — carbon, liquefied natural gas, nickel sulphate and lithium carbonate — have so far not attracted large volumes of trades. But executives hope that gold — a highly liquid market — will gain traction more quickly.
“It’s going to be the most versatile contract out there,” says Jeff Currie, former head of commodities research at Goldman Sachs, who is a member of Abaxx’s board.
“You will have optionality that does not exist in other contracts,” particularly if trading hours are extended to seven days a week, he added.