Electronically traded gold and silver has risen significantly on the Icap-owned FX spot platform, EBS.
Trading interest has driven daily US dollar-denominated volumes for e-traded spot gold and silver up 85% during 2006 and the pattern is continuing into 2007.
More than 360 counterparties are e-trading gold and silver on EBS, contributing to average total daily spot traded volumes of USD 145 billion (single count).
The ICAP-owned platform has recently added an API-based trading capability for gold and silver traders. This has enabled algorithmic or 'black box' trading for banks and non-banks including hedge funds and added incremental liquidity to the market.
Enhanced technology, including prime brokerage relationships facilitated through EBS, have brought in dozens of new gold and silver trading organisations from both emerging and developed markets across Continental Europe, North America, Latin America and Asia Pacific.
EBS introduced e-trading in spot precious metals in July 2000 and remains the leading electronic broker in spot gold and silver through the Loco London market.
Darryl Hooker, emerging markets, developing currencies and precious metals manager, EBS, said: "We've seen a net increase in the number of counterparties e-trading gold and silver on EBS both through prime broking relationships and algorithmic trading.
"That's bringing liquidity in those precious metals traded against the dollar, which in turn creates more opportunities to trade for the market as a whole, because metals traders can get the right price at the right time in gold and silver.
"Customers trade precious metals with us to support a variety of strategies, be it hedging, speculation, risk management or arbitrage.
"E-trading in precious metals is growing as technology creates both efficiencies and better trading opportunities. We're hearing from traders interested in trading gold against other currencies such as the yen, something we're investigating now.
"Global counterparties value the liquidity and access to counterparties on the EBS platform. If you want to trade spot gold and silver professionally, it's the ideal e-trading venue to find the right pricing at the right time."
Peter Kane of Greenwich Associates said: "EBS buy-side clients we surveyed are trading more than 80% of their FX cash and forward needs electronically, and a high percentage are using the technology to trade precious metals".