Gold futures market was reopened in Hong Kong on Monday after being suspended for a decade.

"This is an ideal time to have gold futures in Hong Kong not only because of the interest in the commodity, but also because of the greater volatility we are seeing in its price," said Ronald Arculli, chairman of the Hong Kong Exchanges and Clearing Limited (HKEx), at the opening ceremony.

Globally, gold has increasingly been in the headlines as a safe harbor amid these turbulent times, with the price more than doubling in the past five years.

The Hong Kong Futures Exchange Ltd. (HKFE), a HKEx subsidiary, introduced trading of gold futures on Monday morning. Gold futures were previously traded on the trading floor of the Exchange in the 1990s, which were subsequently suspended due to slow underlying market activities.

With renewed trading interest in the gold market, HKFE reintroduced gold futures trading on the electronic trading platform, the HKATS, to broaden participants' range of products offering.

The contract design for gold futures is based on the London gold standard which is popular among Hong Kong and international investors. Investors, bullion dealers, banks and corporations involved in gold businesses have an alternate trading and hedging tool to manage their gold price exposures.

Gold is a very important commodity in the Asian culture. About 60 percent of gold imports and 40 percent of gold exports take place in the region. Hong Kong is also the Chinese mainland's largest trading partner for gold, which, according to the World Gold Council, has been the world's largest gold producer since 2007.

Hong Kong accounts for 20 to 30 percent of Asian gold exports, making it an important trading hub.

"We believe HKEx's open, competitive and well-regulated gold futures market will be able to provide a deep liquidity pool in the Asian time zone to facilitate price discovery and risk management based on the widely used London gold standard," said the chairman.

(Xinhua News Agency October 20, 2008)