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LONDON (Reuters) - The London Metal Exchange’s gold and silver futures are being thrown into doubt, with the imminent resignation of Societe Generale as a market maker threatening to deepen a decline in trading activity, three sources said.

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FILE PHOTO: A participant stands beside an illustration of gold at a booth during LME Week Asia in Hong Kong, China June 14, 2016. REUTERS/Bobby Yip

SocGen, one of five lenders that partnered with the LME to launch the contracts in 2017, is expected to resign shortly as a market maker, taking the number of banks committed to offering tradeable prices to two — Goldman Sachs and Morgan Stanley, the sources said.

That has triggered a discussion over the contracts’ future.

“There’s still commitment,” said one of the sources. But if volumes remain low, they added, “we’ll have to sit down and decide what is the next stage — exit, restructuring, or something else.”

The LME bet that the contracts would benefit from tightening regulation pushing some of London’s $10 trillion-a-year gold market from over-the-counter (OTC) deals between banks and brokers to centrally cleared exchanges.

To drive activity, it took the unusual step of cutting a deal with partners to share revenue in return for commitments to trade.

But even as a surge in gold prices this year pushes trading on CME Group’s New York COMEX market and the Shanghai Gold Exchange to record levels, turnover on the LME’s contracts, known as LMEprecious, has dropped.

SocGen declined to comment. The French bank earlier this year announced it would exit over-the-counter (OTC) commodities trading as part of a push to improve profitability, but did not say it...

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