Gold Futures Live Chart
COMEX Gold Technical Analysis
About Gold Futures
What is Gold Futures?
Gold futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of gold at a predetermined price on a future delivery date.
Major Worldwide Gold Trading Hubs
The landscape for wholesale gold trading is pretty complex and continuously evolving. The three major gold buying and selling centers are the London OTC marketplace, the US futures market and the Shanghai Gold Exchange (SGE). These markets include more than 90% of worldwide buying and selling volumes and are complemented by smaller secondary market centers around the world.
COMEX Gold Exchange
Despite London’s leading role in the physical market, the COMEX derivatives exchange has become an increasingly important. Trading activity on COMEX is primarily concentrated on the ‘active month’ contract which acts as a proxy for the spot price. Only a small number of contracts physically settle into the delivery of bars into COMEX vaults but the market is nonetheless tightly linked to physical markets through a very active Exchange for Physical (EFP) market. Notably, a steadily increasing share of COMEX volume is transacted during Asian market hours reflecting the exchange’s success of tapping into Asian market growth.
Gold is extremely valued because of its beauty, strength, density and infrequency. It is genuine by air, heat, moisture and most solvents. Gold is a significant industrial commodity as it can conduct both heat and electricity. Gold is normally used in jewelry, electronics, and reflective glass. Gold is mined on every land except for Antarctica. Nearly all gold that has been mined throughout history is still existence in the world today because of its indestructibility. The Unites States is a top producer of gold, behind China and Australia respectively.
From 1792-1971, the United States had a bimetallic standard, meaning that all paper currency was backed up with its face value in gold. This ensured that a physical asset of value existed in conjunction with American currency. The rate of gold continues to remain a bull market in the current climate, with record high prices in the past few years.
Advantages of investing in Gold FuturesSome of the major advantages of Gold Futures are mentioned below.
Hedge against inflation: Gold represents a viable way to hedge against weakness in the largest global economy – the United States. US economic weakness is likely to spill over into other economies, and central banks typically react by lowering interest rates and increasing the money supply. When these remedies fail to spur demand, they can lead to significant inflation and loss of purchasing power. Unlike fiat currencies, gold maintains its purchasing power in periods of inflation.
Speculate on Rising Gold Prices: Investors optimistic about the economic prospects of developing nations such as China and India may see gold investing as a way to profit from this view. Gold has played an important role historically in these countries, and more wealth will likely translate into more demand for gold.
- It excludes the need for immediate storage, as a buyer will not have to worry about finding secure storage facilities to store the gold.
- Participating in this trade involves lower amounts, as a buyer can pay a certain amount at the time of making a deal and the remaining on signing the agreement.
- There is considerable liquidity on offer.
- There is a provision to short sell.