Singapore Mercantile Exchange said Tuesday that it will commence trading of gold futures, West Texas Intermediate crude oil, Brent crude oil and EUR/USD futures contracts on Aug 31 and implied there could be additional contracts launched at the same time, but didn’t specify which these might be.

“The first phase of product launches will be followed by multiple product launches to be introduced in the market after consultation with industry participants,” it said in a statement.

The launch of the SMX reflects increasing competition for Asian commodities business with major global exchanges like CME Group Inc. (CME) and the London Metal Exchange, both of which are expanding operations in Asia.

SMX is wholly owned by Financial Technologies (India) (526881.BY), which had invested $75 million in the venture by the end of last year.

According to a report in the Financial Times Tuesday, the exchange intends to take a 3% to 5% market share of commodities and derivatives contracts traded annually in Asia.

The CME has increased sales staff at its regional headquarters in Singapore as it attempts to encourage more participation on its CME Globex trading platform.

The LME officially opened an Asian office in June, also in Singapore, and announced in July it would launch mini monthly copper and zinc futures contracts in conjunction with the Singapore Exchange (S68.SG) by the first quarter of 2011.

Some market participants have expressed skepticism that SMX will gain much traction in products like gold and crude oil, where competition from established platforms like Globex will be fierce.

Traders logically choose the most liquid platform in which to trade, putting new exchanges like the SMX at an immediate disadvantage.

There are many examples where futures contracts have failed to gain any market share, despite the presence of thriving physical commodity trade in Asia, with the Tocom aluminum contract a case in point.

Nor is this the first time a regional commodities derivatives exchange has been launched.

In 2006 Singapore Exchange and the Chicago Board of Trade (CBOT) launched a joint venture called the Joint Asian Derivatives Exchange, where commodity derivatives were to be traded.

JADE was dissolved in late 2007 after the CME acquired CBOT.

SGX responded by buying Sicom in 2008, another Singapore-based commodities exchange, which hosted a rubber futures contract, and has since added coffee and fuel-oil contracts.

SMX Chief Executive Thomas McMahon clearly thinks the timing is right for a new entrant though.

“The launch will provide market players in Asia the flexibility to trade products generic to regional trade flows within the Asian business day,” he said in a company statement.

The SMX gold contract will offer physical delivery in vaults in Singapore, which could be an advantage for jewellery traders and other physical market participants in Singapore, said Avtar Sandu, manager for Asian commodities at Phillip Futures in Singapore.

“If you have a Comex contract and you want to take delivery, it will be to a vault in New York. Singapore traders might find it more convenient to use the SMX contract instead,” he said.

A spot gold trader at an international bank in Singapore, who didn’t wish to be named, said planning for SMX participation did not yet appear to be a top priority, although he understood his bank was to be involved.

“We haven’t confirmed anything yet. I haven’t heard much about it, to be honest,” he said.