The CME Group in the USA will start offering one-ounce gold futures contracts in January next year to meet the growing demand from retail investors as gold prices reach record highs.

As spot gold prices have repeatedly set historical highs this year, retail investors are increasingly inclined to seek smaller-scale gold products to diversify their portfolios. Gold is a safe-haven asset during times of economic and financial uncertainty.

Jin Hennig, the global head of CME's metal business, said in an interview that the one-ounce contract is "a great way to lower the barrier to market entry." "Our customers are also getting younger, making it easier to achieve this."

CME stated in a press release on Thursday that the futures contract will be available for sale starting January 13 next year, pending regulatory review. The newly launched product complements the retail-friendly micro gold futures and micro silver futures, which are only a small fraction of the benchmark futures contracts. CME noted that these products are among the fastest-growing metal products, reaching record trading volumes this year.

CME also expects strong demand for the new contract from retail investors in Asia, as gold has deeply rooted itself in the region's culture as a store of value and a hedge against turmoil.

Hennig stated that the contract provides a "meaningful way for Asian individual traders to manage their wealth."

Since the beginning of this year, gold prices have skyrocketed, setting new highs repeatedly. Traditional views have long held that gold will surge when geopolitical tensions escalate or economic uncertainty spreads. However, the "gold rush" of 2024 differs from most previous gold rushes. In addition to conflicts like the Russia-Ukraine conflict and turmoil in the Middle East, other factors are driving gold prices higher this year. The prospect of a soft landing in the USA and lowered interest rates have also fueled the sparks in the market.

It is hard to imagine a safer asset than gold — central banks and consumers around the world have not forgotten this fact. After the outbreak of the Russia-Ukraine conflict, the West successfully froze Russia's assets. This action sounded the alarm globally, prompting central banks to take self-protective measures. The central bank of china has also significantly increased its shareholding in gold to diversify its investments away from the dollar.

Some analyses suggest that the real driver behind the "gold train" in 2024 is the chinese people. China's vast consumer market is purchasing gold jewelry and even gold bars to guard against unknown risks, causing gold prices to soar.

Editor/Rocky