CMC Provides Update On Why It Is Halting Gold And Silver Futures Products

Yesterday we reported on the halt of gold and silver futures trading by Australian broker CMC Markets. As noted, CMC did indicate it would continue trading gold and silver spot products, which is why we were surprised by the difference in trading halt outcomes between the Australian firm and which had halted XAU and XAG outright. To provide further clarification on the CMC decision, here is an email we received from Jane Bryant, PR campaign amanger at CMC Markets...

Hi Tyler,

I read your post 'Another broker halts trading gold and silver products' with interest, as obviously it is about CMC Markets in Australia. My concern is that your blog post does not communicate the real reason why CMC Markets has stopped trading gold and silver futures.

Put simply - we still offer spot gold and spot silver as they are more liquid, have a greater transactional flow and have more continuous pricing when compared to silver and gold futures. CMC has stopped trading silver and gold futures purely for commercial reasons (ie we have overwhelming client interest in gold and silver spot products), and is not connected in any way to Dodd-Frank's product prohibition.

So there you have it: people are just not interested in trading gold and silver futures. Which is probably not good if indeed gold and silver spot trading, where allegedly the bulk of the volume is concentrated, will soon be prohibited by Dodd-Frank.

We have sent an inquiry into CMC to ask if they will halt spot gold and silver trading in light of the Frankendodd developments. We will post it as soon as we get it.