Singapore Bullion Market Association

Getting to Know FGLD: An Alternative to Physical Gold

By Bursa Malaysia Derivatives Berhad

The Gold Futures contract (FGLD) is traded on Bursa Malaysia Derivatives Berhad, a wholly owned subsidiary of Bursa Malaysia Berhad, which provides, operates and maintains a futures and options exchange regulated by the Securities Commission Malaysia.

FGLD was first launched on 7 October 2013 and its contract specifications were revamped on 19 September 2022. The enhanced FGLD is a US dollar denominated futures contract and is settled through cash in Malaysian ringgit. It is designed to provide market participants with exposure to international gold price movements.

As a derivative of the precious metal, FGLD is tied to a minimum of 995 fineness of gold and is also in line with other technical specifications of gold under the London Bullion Market Association (LBMA). This ensures that the FGLD offers transparency in gold prices and reflects the true value of gold as precisely as possible.

When it comes to the contract size, each FGLD contract is equivalent to the reference price per troy ounce multiplied by the contract multiplier of 40. This also means that each FGLD contract has a minimum price fluctuation of US$0.10 at 4 ringgit per tick value.

FGLD is tradable from Monday to Friday, with the exception of public holidays in Malaysia. There are three key trading sessions for FGLD, starting from 9:00 am to 12:30 pm Malaysia time, resuming from 2:30 pm to 5:30 pm, and recommencing for after-hours (T+1) trading session from 9:00 pm to 2:30 am (Monday to Thursday only).

By settling into the LBMA Gold AM Price at expiry, FGLD can mirror the international gold prices traded in key markets.

From 2 February 2023 to 30 June 2023, Bursa Malaysia Derivatives Berhad is offering a limited-time fee waiver on the trading and clearing fees for investors when they trade FGLD.

Correlation between LBMA, COMEX Gold and FGLD

Source: Bloomberg