Gold and Silver Commodity Market Standards Vary Between Markets


October 17, 2019

Pat Heller



Gold and silver commodity futures contracts are traded on exchanges around the world.  The largest market is in London, England, but two other major exchanges are the New York COMEX and the Shanghai Gold Exchange SGE).

Some other lower volume exchanges are traded in Chicago, Sydney, Tokyo, and Zurich, Switzerland.

Contract specifications can and do vary from one exchange to the next.  To give you some idea of the variability, here are some of the details.



The standard COMEX gold contracts are for a 100 troy ounce bar of .995 or higher purity.  In the London market, the standard contract is for a 400 troy ounce bar, of which bars between 350 to 430 ounces in size are allowed.  Again, acceptable minimum purity is .995.  In both markets, contract prices are quoted in US dollars.  Gold futures contracts for both tend to be highly leveraged.  Only a very tiny percentage of contracts mature and result in the delivery of the underlying physical metal.

In the Shanghai Gold Exchange, the gold market operates substantially different.  The standard contract size is one kilogram (about 32.15 troy ounces).  Bars provided from domestic sources must be at least .9995 pure.  Non-domestic bars must meet London market purity specifications, though it appears that the lowest purity bars that trade on this exchange are .999 fine.  Prices are quoted in Chinese yuan.  Before a seller is allowed to offer a contract, the underlying physical gold must be in the possession of the SGE.  Before a buyer is allowed to purchase a contract, they must have sufficient “good funds” in the custody of the SGE.

The latest data I know is that about 94% of SGE gold trades result in the immediate physical delivery of the physical gold.  Since almost all trades are completed with the delivery of physical metal, SGE gold prices tend to be at a premium to London and New York prices.

Since the Shanghai Gold Exchange became operational earlier this decade, a huge quantity of larger bars that were mostly refined in Switzerland and originally destined for the London market have instead been shipped to China to be melted down into kilogram bars to be traded on the SGE.



The standard COMEX silver contract is for 5,000 ounces, which generally means five approximate 1,000 troy ounce bars of a minimum .999 purity.  The London market formerly required bars traded there to be at least .9999 fine, but now only requires .999 purity.  Bars ranging from 750-1,100 troy ounces are traded in London contracts, though a range of 900-1,050 troy ounces is preferred.

The Shanghai Gold Exchange trades silver contracts of 15 one-kilogram bars (about 482.25 troy ounces of silver.  Minimum required purity is .999 fine, but bars of .9999 minimum fineness trade at a premium price.  Prices are quoted in Chinese yuan and virtually all purchases result in immediate delivery of the underlying metal.  As with gold, silver prices on the SGE tend to trade at a premium to the London and New York markets.

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