However, the coronavirus pandemic has both ground flights and shut down refineries, leading to the highest premium for 100-ounce New York gold bars in four decades.
On Tuesday, gold futures increased to 7.7% in New York, and at peak commanded a $67.57 per ounce premium over London prices as traders worried they couldn't move the metal.
The same day, CME Group announced a plan to address the issue. The London Bullion Market Association asked the CME to change its rules, to accept 400-ounce bars in London against its contracts. This would eliminate the need to transport and recast the metal into different weights.
The CME didn't change its rules but said, it would launch new gold futures that could be settled using 400-ounce, 100-ounce, and one-kilogram gold bars and instruments to link these with its existing contracts.
Derek Sammann, Senior Managing Director and Global Head of Commodity and Options Products for CME Group said in a press release:
This time of unprecedented market conditions has led to growing demand for a broader range of delivery needs for our clients worldwide. By offering a choice of delivery sizes as well as inter-commodity spreads with our benchmark gold futures, this new contract will provide customers with maximum flexibility in managing physical delivery.