Understanding the Implications of the CME's New 1 oz Gold Futures

The CME is launching a gold futures contract to meet surging demand from retail traders, but it will only flood the market with more 'paper' gold.

CME Group Inc., the parent company of COMEX, the leading U.S. exchange for gold and silver futures, will introduce a one-ounce gold futures contract in January. This move comes in response to soaring demand from retail investors, spurred by gold's record-breaking rally this year from $2,000 to $2,630—a respectable 32% gain. Smaller-sized gold products h…