Crude Oil and Gold Prices Volatile; Business Operators Urged to Use Hedging Mechanisms

Jakarta — The hedging mechanism is crucial for business operators with long-term operations, according to Nursalam, Director of Indonesia Commodity and Derivatives Exchange (ICDX).

He noted that multilateral trading of futures contracts for both crude oil and gold has been conducted at ICDX, which can be utilised by business operators for hedging purposes.

“Amid highly volatile commodity prices due to various factors, the hedging mechanism is essential for business operators with long-term operations,” he stated recently.

For crude oil and gold commodity futures contracts, the products traded multilaterally at ICDX include GOFX, a commodity derivative instrument comprising spot and futures gold contracts, crude oil futures contracts, and mini-sized spot forex contracts (1/10 of the standard contract size).

Regarding multilateral trading of gold and crude oil commodity futures contracts in 2025 at ICDX, Nursalam noted that multilateral transactions for crude oil-based commodity contracts reached 61,260 lots, whilst multilateral transactions for gold-based commodity contracts reached 1,627,698 lots.

Crude oil commodity futures contracts are dominated by COFRMic contracts with 51,548 lots in transactions. COFRMic is a micro-sized crude oil futures contract referencing West Texas Intermediate (WTI) pricing as the underlying.

The contract has a size of 10 barrels per lot, providing market participants with more flexible access to conduct transactions and hedge against crude oil price movements.

For gold commodity futures contracts, GOLDUDMic contracts dominate with 682,310 lots in transactions. GOLDUDMic is a micro version of the GOLDUD contract at 1/100 of the standard contract size with a minimum transaction of 1 micro lot (equivalent to 0.01 GOLDUD contract).

“The smaller contract size makes USD-based gold transactions more affordable, whilst still providing exposure to global gold price movements referenced to the Loco London market,” Nursalam stated.

GOLDUD is a daily-rolling gold contract denominated in USD traded on the exchange with a contract size of 10 troy ounces per lot. The contract references gold prices on the international Loco London market with a purity level of 99.99 per cent, thus reflecting global gold price movements.