CME to Allow Physical Settlement for Weekly Gold Options

June 18, 2012 By 10 Comments

Reuters reports tonight that the CME Group for the first time will allow physical settlement (longs can take physical delivery) for weekly gold options contracts effective July 1st.

Effectively the move allows options holders to exercise into futures contracts and take physical delivery of gold bullion should they so desire.

This is largely a PR move (and an effort to steal volume from various OTC exchanges) but notice that a mechanism for physical SILVER settlement was not included in the change. 

CME Group is allowing investors in its short-term gold option contracts to take delivery of physical bullion in a bid to increase the product’s appeal against over-the-counter gold options.

The biggest operator of U.S. futures exchanges said it will amend the contract of its weekly gold options to let investors exercise into futures contracts effective July 1, pending approval from the U.S. Commodity Futures Trading Commission, CME said in a notice late last week.

Prior to the change, the options, which were launched in July last year on CME’s COMEX metals platform, were settled by cash only and physical delivery was not permitted.
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Comments

  1. Avatar of Rusty Shackleferd Rusty Shackleferd says:
    June 18, 2012 at 11:29 PM

    No silver included??? could it be…. BECAUSE THERE IS LITTLE TO NONE LEFT!!!!

  2. Avatar of 4 oz 4 oz says:
    June 18, 2012 at 11:32 PM

    From KWN 6-18-12

     

     

    “…looking toward what I believe is going to be the greatest bull market
    of our lifetime….The same could be said for silver. Japan is just now putting
    in 3.2 gigawatts of solar. Now 3.2 gigawatts of solar is not a lot, but that
    small amount of solar requires about 400 tons of silver. That is just the first
    step in Japan. You know China will be coming in behind the Japanese with heavy
    solar use. What you are talking about here is shortages of silver over the next
    5 to 10 years, massive shortages.”

    —Stephen Leeb

     

  3. Avatar of 427 427 says:
    June 19, 2012 at 12:40 AM

    This was in the main article as well wich I thought was telling.

    Grams said that the CME has no plans to change other option products at this time.
    This says to me they asked grams about silver, and hell no was the answer.
  4. Avatar of AGXIIK AGXIIK says:
    June 19, 2012 at 12:56 AM

    If Japan rotates to solar to help with their power suppy, having shut down all 52 nuclear power plants, that will go along way to reducing their dependence on oil and natural gas, supplies that are currently costing $100 billion annually.  Japan can’t afford to send that much in the way of reserves off island if they are to come close to being economically viable.  Their reserves were built up over years and yet they still have huge budget deficits.  It is imperitive that they find another power source before oil and nat gas bleed them of their reserves and bankrupt the nation. The Japanese are in serious shape and solar could prove a godsend if the supply of silver holds up

  5. Avatar of The Toronto Minnow The Toronto Minnow says:
    June 19, 2012 at 3:40 AM

    Unveil the next wave of “free” energy technology.  Oh, wait…there’s no global “control” without energy “scarcity”.  Oh well, I guess the Japanese people are screwed off the map now…  maybe their pathetic servile leaders will grow some mutant balls now – or a mutant spine – and make it finally happen. 
    Meanwhile, the rest of us will surely bio-accumulate the problem until it’s gone..or we are.
    Can’t tell if my silver is shiny…or glowing.
    Maybe I should pound it all into a giant ovoid hull and dump an extremely high-frequency oscillating electrical charge through it until it floats – then jump in, and head for the “safety” of the moon colony.

  6. Avatar of 2 OZ. 2 OZ. says:
    June 19, 2012 at 4:52 AM

    Hilarious TTN. Japan is now thinking of starting up some of their nuclear reactors again. But don’t they have to move Tokyo to another island now??????? Sounds like a solar boom to me if they have to populate another island with 40 million people because they were forced by nuclear nasty’s.

  7. Avatar of 2 OZ. 2 OZ. says:
    June 19, 2012 at 5:02 AM

    Silver = Achilles Heel = No special deals for silver. They’ll play this game with gold but not silver.

  8. Avatar of silverbullion silverbullion says:
    June 19, 2012 at 7:15 AM

    Yeah, better stack up while there is still some silver left.

  9. Avatar of jj83 jj83 says:
    June 19, 2012 at 10:44 AM

    @ 2 OZ.  The article about moving to the islands apparently is a fake.

     

    In any case, don’t think the islands could support 40million people.  Right now there is something like 16,800 people according to the wiki.

     

    http://en.wikipedia.org/wiki/Kuril_Islands

  10. Avatar of Marchas45 Marchas45 says:
    June 19, 2012 at 5:11 PM

    I wonder how much they will charge for Shipping and Handling Costs? It’s probably a lot higher for Gold than it is for Silver, that’s why they will ship Gold. LMAO

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