JFX offers more affordable gold futures for middle class

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The Jakarta Futures Exchange (JFX) launched a new gold futures contracts on Tuesday to give local investors more affordable investment options.

“The new contract will make it possible for middle-income people to invest in gold, as they will only have to pay a margin fee on the total contract,” JFX president director Made Soekarwo said after the launch.

The new contract was given the trading symbol “GOL 100”. Each lot, traded in rupiah, is worth 100 grams of gold and contracts are valid for three consecutive months. This the JFX’s second gold futures contract, following the introduction of a 250-gram contract in October 2010.

The margin fee was set at 5 percent, while the trading session for GOL 100 has been slated for 9:30 a.m. to 5:30 p.m. on weekdays.

JFX director Bihar Sakti Wibowo said that GOL 100 contracts had a soft launch in June preceding Tuesday’s official launch.

GOL 100 rose 1.18 percent to Rp 494,600 (US$52.46) a gram as of 5:30 p.m. on Tuesday, up from
Rp 488,800 the previous day.

Realtime Futures analyst Wahyu Laksono said that gold would continue to be a safe-haven investment although prices have fluctuated over the last several months.

“Gold futures are profitable for short-term investments. The introduction of the 100-gram version will make it even easier for people with limited income to invest,” Wahyu said.

The JFX is cooperating with PT Pegadaian as to provide delivery points for the contracts. The state pawnshop operator has prepared its regional offices in 12 cities across Indonesia for GOL 100 sales, including Balikpapan, East Kalimantan; Bandung, West Java; Batam, Riau Islands; Denpasar, Bali; Jakarta; Manado, North Sulawesi; Medan, South Sumatra; Pekanbaru, Riau; and Surabaya, East Java.

“Investors who want physical delivery can fetch their gold at the branch offices of PT Pegadaian in those cities,” Wahyu said.

The JFX recorded total multilateral transaction trade volume of 87,622 lots in the first half of 2012, up 225 percent from the same period last year. The total included 50,289 gold futures lots.

Bihar said that the JFX expected its gold futures contract volume to increase 100 percent in 2012, from 63,645 lots in 2011.

“We hope that GOL 100 will contribute between 20 and 25 percent to the total amount of gold futures in the next three months,” Bihar added.

Gold prices have been on the rise in recent months as investors increased gold purchases amid the escalating Eurocrisis. US gold future contracts for August delivery gained 0.5 percent to $1,606 an ounce on Tuesday, according to Reuters.

JFX director Roy H.M. Sembel said that JFX targeted trading 1,500 lots a day, including gold and cocoa
futures.

Made said that the JFX was also preparing to launch contracts on coal and rubber this year.

“We haven’t decided on the contract that we will launch first. We are still holding talks with associations and regulators. We hope to be able to realize the plan within the next six months,” he said.

JFX opened operations in 1999, focusing on trading contracts for olein, cacao and gold. Olein contracts rose to 15,027 lots in the first half of 2012, up 220.47 percent from the same period last year.

The volume of cacao futures has risen 1,200 percent from December, when the JFX started futures
trading for the commodity. (tas)