Gold Futures

Market

Gold futures are a commodity futures product in the precious metals futures group. Few markets have the allure of gold; the yellow metal has long been viewed as a store of wealth — a “hard” currency that retains or gains value in times of inflation — and a symbol of prosperity. China, South Africa, the U.S., Australia, Canada, Indonesia and Russia collectively represent the backbone of global gold production.

History

The first known use of gold was in parts of Central and Eastern Europe, in 4000 B.C. The Egyptians used gold to embellish their kings in life and death, and by 1500 B.C., gold had become a standard medium of intercontinental trade. Similarly, goldsmiths of the Chavin civilization in South America were making ornaments by hammering and embossing gold by 1200 B.C. Gold has developed widespread commercial use as a coating on electrical connectors. It can be found on various devices, from audio and video cables to computer and component cables and connectors. It is also the most actively traded contract in the CME Group’s Commodity Exchange (COMEX) and InterContinental Exchange (ICE) metals complex, which includes market leading silver, copper, platinum, palladium, aluminum and iron ore futures contracts. Gold is the ultimate store of value. Buying gold as an anti-inflation hedge is the primary use of gold today.

Facts

Gold futures offer a far more liquid and efficient marketplace than the physical gold market for taking positions in gold. Central banks and the International Monetary Fund play an important role in the gold price, as do global events and the price of oil futures and the U.S. dollar. Significant economic reports from around the world also impact the price of gold futures, such as quarterly GDP reports, Import/Export data, and in the U.S., monthly Employment Reports. Gold futures are considered a flight-to-quality investment, much like oil.

Trading

Gold futures are traded at the following exchanges:

  • COMEX (the largest Gold Futures exchange by volume in the world)
  • Chicago Mercantile Exchange (CME)
  • India National Commodity and Derivatives Exchange (NCDEX),
  • Dubai Gold and Commodities Exchange (DGCX),
  • Multi Commodity Exchange (MCX)
  • and Tokyo Commodity Exchange (TOCOM)

COMEX Gold futures are delivered every year in all months. Worldwide gold production continues to underperform against worldwide demand. At the current level of production, it is assumed that worldwide gold supply will not be able to meet the demand.

You can learn more about Metals futures by downloading our guide, Free Fundamentals of Trading Metals Futures.

 

Contract Specifications  

Contract SymbolContract UnitPrice Quotation
GGC100 troy ouncedollars per ounce
Trading ExchangeTrading HoursTick Value
CME COMEX18:00 - 17:15 (NY)$0.10/oz. = $10

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.