ICE Challenges New York’s Dominance with Daily Precious Metals Futures in London

Original article: ICE desafía el dominio de Nueva York con futuros diarios para lingotes de metales preciosos en Londres

The U.S. exchange launches physically settled contracts for gold, silver, platinum, and palladium, betting on the vault infrastructure of the City to attract the bullion industry. However, liquidity remains a significant concern. ICE is challenging New York’s preeminence with daily futures for precious metal bars in London and thus competes with COMEX.

By Bruno Sommer Catalán

LONDON– Intercontinental Exchange Inc. (ICE) has commenced trading daily precious metal futures in London this week, making a direct move into the heart of the world’s largest bullion market, where over $190 billion is traded daily in the over-the-counter (OTC) market, and London’s vaults hold around $1.4 trillion in precious metals.

This initiative, confirmed by the Financial Times on October 6, positions ICE – owner of the New York Stock Exchange – in direct competition with CME Group, whose gold contract on Comex averaged about $125 billion in daily volume during the first half of the year. ICE aims to capture a share of that flow by offering producers, refiners, and traders a settled product that mirrors the specifications of the London physical market.

Specifications Aligned with the Physical Market

The new ICE contracts are designed to reflect the mechanics of the loco-London market. According to the exchange’s specifications, gold futures are set at 100 troy ounces – the standard size for 400-ounce bars that dominate the wholesale market, fractioned for hedging ease – while platinum trades in 50 troy ounce contracts and palladium in 100 troy ounce contracts. All contracts are physically settled, with delivery through recognized vault accounts in London managed by members of London Precious Metals Clearing Limited (LPMCL).

Expiration dates range from same-day settlement to six months, with reference prices linked to daily electronic auctions managed by ICE Benchmark Administration for the four metals. Clearing will occur through ICE’s London operation, which also handles Brent crude futures.

«Derivatives markets are meant to support the physical market,» stated Chris Rhodes, President of ICE Futures Europe. «The physical market is in London. We believe that if people are allowed to manage their risk differently, that could be an attractive prospect, particularly if linked to auction prices».

A History of Failed Attempts

The launch is not free from skepticism. London has attempted twice before to establish a gold futures market, both times unsuccessfully. The London Gold Futures Market operated from 1982 to 1985 before shuttering due to a lack of speculative interest. More recently, the London Metal Exchange (LME) launched its LMEprecious project in 2017 and closed it in 2022 after five years of «insignificant» volumes. ICE itself made a similar attempt in 2017 that did not gain traction.

Peter Zoellner, President of the London Bullion Market Association (LBMA), acknowledged in October 2025 that those attempts «were perhaps premature,» but argued that the global market would benefit from having «two or three trading hubs with good liquidity». Advocates for ICE argue that the difference now is the current context.

The London-New York Spread and Gold Geopolitics

The market environment in 2026 has created conditions not present in previous attempts. Volatility in the price spread between London and New York – which inverted the historical premium in January, with spot gold in London trading above the Comex futures – has increased demand for hedging instruments that operate directly on the London physical price. Distortions have been exacerbated by flows of bullion into the U.S. following trade measures in April 2025, which prompted dealers to transfer large amounts of gold to New York when futures were quoted at a premium to the physical.

Adding to this is a shift in central bank reserve policies. The Nederlandsche Bank transferred around 86 tons of gold from New York and Ottawa to London between March and August 2026, citing «increasing geopolitical instability» and concerns about potential government actions. The transaction, valued at about €10 billion, underlines the perception of London as a safer custody jurisdiction in an environment of trade and fiscal tensions.

Meanwhile, gold is trading at historic highs. The metal reached $4,221 per ounce in early October, and the Comex contract for October delivery closed at $4,159.20. Zoellner attributes the rally to central bank purchases and concerns over the fiscal sustainability of major economies. «Public debt has skyrocketed,» he noted. «Globally, perceptions about political alliances, trade policy, and fiscal and monetary policies are shifting».

Competition and Challenges

ICE is not only competing against CME. The Shanghai Metals Exchange and the Shanghai Gold Exchange have gained ground as pricing hubs, and the UK faces pressure to modernize its infrastructure. The Financial Conduct Authority (FCA) is evaluating a regulatory framework for tokenized gold that would exempt these products from collective investment fund rules, in an effort to maintain London’s relevance in the face of Asian competition. The FCA estimates that the UK accounts for about 70% of global gold trading volumes, but warns that China seeks to become a bullion center.

The immediate challenge for ICE is liquidity. Neither the exchange nor the FT report provided data on traded volume or open interest. Without this metric, the ability of the new contracts to attract market makers and reduce price distortions between London and New York – the central argument for their usefulness – remains unproven. In the futures market, where volume generates volume, London’s historical challenge has been precisely that: convincing traders to abandon the deep and liquid Comex contracts for a new alternative with an yet undefined risk profile.

ICE bets that its linkage to the price auctions it already manages – involving 20 firms including Jane Street, DRW, Goldman Sachs, and Citi, with daily auction volumes exceeding 424,000 ounces – provides a credibility advantage over previous attempts. The question remains whether that credibility in price setting will translate into trading depth.

For now, the industry is observing. The infrastructure is ready, the macroeconomic context is favorable, and the demand for hedging in London has never been more evident. What remains is the confirmation that the market is willing to operate where the metal is stored.

By Bruno Sommer

El Ciudadano

COMEX, in summary: is New York’s main futures market for metals, owned by CME Group. It trades contracts for gold, silver, copper, and other metals: agreements to buy or sell a quantity of metal at a future date for a price set today. Although physical metal is not always delivered, its prices serve as a global benchmark. In other words: it is “the metals exchange of New York,” and so when it is said that ICE challenges New York, it actually competes against COMEX.