Kalshi Seeks CFTC Nod for Metals Perpetuals Amid 25% Gold Slide

Woofun AI reports that Kalshi has formally submitted an application to the Commodity Futures Trading Commission (CFTC) to introduce perpetual futures contracts for gold, silver, and platinum, marking a strategic pivot from cryptocurrency derivatives into traditional precious metals markets.

The regulatory pathway for these new instruments is distinct from standard event-based contracts, which exchanges can often approve internally. Instead, the CFTC holds a strict 45-day window to adjudicate the request, reflecting heightened scrutiny for novel product structures. If approved, the proposed contracts will operate on a 24/5 schedule, trading five days a week to align with traditional precious metal market hours. This stands in contrast to the continuous, around-the-clock nature of existing cryptocurrency perpetual contracts, signaling an attempt to bridge the operational gap between digital and traditional asset classes.

Udesh Jha, Kalshi’s chief risk officer, indicated that the firm is still evaluating the feasibility of extending trading hours beyond the current proposal. This flexibility suggests that while the initial application adheres to traditional market rhythms, the underlying technology may eventually support more continuous liquidity, depending on regulatory feedback and market demand.

Structurally, perpetual futures are defined as derivatives without an expiration date, allowing investors to maintain positions indefinitely and amplify exposure through leverage. Historically, this instrument was the exclusive domain of the crypto market, where it facilitated high-frequency speculation.

However, as geopolitical tensions intensify and demand for immediate hedging tools grows, perpetual futures are increasingly migrating into broader asset categories, challenging the traditional dominance of dated futures contracts.

A more critical variable driving this shift is the behavior of retail investors during periods of market closure. For instance, during the war in Iran, traders utilized perpetual futures to speculate on crude oil prices, effectively bypassing the downtime inherent in traditional futures markets. This capability to trade continuously during geopolitical shocks highlights a structural advantage that is now being sought in the precious metals sector.

The competitive landscape is rapidly evolving, with emerging platforms like Hyperliquid already launching contracts linked to real-world assets such as gold and crude oil. This pressure is forcing traditional exchanges to accelerate their own innovations.

Notably, the CME Group plans to officially launch 24/7 trading for its existing 1-ounce gold futures contract on July 26, directly competing with the continuous liquidity model that Kalshi aims to replicate.

Woofun AI data shows that gold prices have fallen by up to 25% from their record highs at the end of January, pressured by expectations that the Federal Reserve would maintain high interest rates. As an interest-free asset, gold suffers when real yields remain elevated.

However, many institutions argue that the current price action reflects overselling rather than a fundamental breakdown, setting the stage for a potential rally.

Central bank accumulation remains a key support level, with Zweig-DiMenna noting that China’s central bank has increased its gold purchases. In the first half of 2026, official gold reserves rose by 40 tons, bringing the total to 75.44 million ounces (approximately 2,346.45 tons) by the end of June. This marked the 20th consecutive month of buying. In June alone, 15 tons were purchased, the highest single-month volume since October 2023. In contrast, China’s annual purchase volume in 2025 was only about $2 billion, highlighting the accelerated pace of recent accumulation.

Technical analysis suggests that current gold prices are trading approximately 10% below the 200-day moving average. Historically, similar deviations preceded significant rallies in 1999 and after 2022.

However, precedents from 1981 and 2013 demonstrate that prices can fall further after overselling, meaning macro conditions remain decisive. Morgan Stanley’s commodity team remains bullish, forecasting a target price of $4,450 per ounce by the end of the year, driven largely by sustained central bank buying.

Despite institutional optimism, current central bank demand is partially offset by outflows from gold ETFs. Last year, ETF investors accounted for about one-fifth of global gold demand, but enthusiasm has waned due to easing geopolitical risks, shifting interest rate expectations, and price corrections. The trajectory of gold ultimately hinges on Federal Reserve policy. If inflation continues to cool and the Fed implements rate cuts, falling real interest rates could restore gold’s appeal and trigger ETF inflows. With global central banks expanding reserves and risk-aversion persisting, the market fundamentals remain intact, suggesting that recent volatility may precede another wave of growth.