In 1994, COMEX and the New York Mercantile Exchange (NYMEX) combined, and COMEX became the platform for metals trading.
How do gold futures on the Comex work?
A precious metals futures contract is a legally binding agreement for the future delivery of gold or silver at a predetermined price. A futures exchange standardizes contracts in terms of quantity, quality, delivery time, and location. The only variation is the price.
What’s the difference between spot gold and gold traded on the Comex?
Comex is a well-organized market where you may buy and sell commodities futures contracts and options, including gold. The price of gold at particular times in the future, for delivery in the future, is the subject of gold-oriented futures contracts and options. The spot market price for gold (or any other commodity), on the other hand, indicates what buyers and sellers are ready to pay for gold right now, for immediate delivery.
What can gold futures tell us?
Gold futures are standardized, exchange-traded contracts in which the contract buyer promises to acquire a particular quantity of gold from the seller at a predetermined price on a future delivery date. Companies in the precious metals business can use gold futures to hedge their gold price risk on a planned future purchase or sale of gold. They also provide investors with a simple and convenient alternative to traditional gold investment methods. Gold is widely regarded as the ultimate repository of value. The principal usage of gold futures contracts may be as an anti-inflation hedge. The gold futures contract’s liquidity makes it easier to profit on opportunities in practically all market conditions.
Where is the Comex exchange located?
COMEX is a subsidiary of the Chicago Mercantile Exchange and is based in Manhattan’s World Financial Center (CME). COMEX is the world’s most liquid metals market, according to CME Group, with over 400,000 futures and options contracts traded daily.
A Comex contract contains how many ounces of gold?
Each COMEX gold contract represents 100 troy ounces of gold with a purity of at least 995. A gold contract is worth $170,000 if gold is priced at $1,700 per ounce. To buy or sell each futures contract, you deposit $6,600 in your margin brokerage account. After you’ve opened your position, you’ll need to keep at least $6,000 in your margin account per contract. A COMEX gold futures contract’s minimal price variation is $0.10 per troy ounce.
Who sets the global gold price?
At 10:30 a.m. and 3 p.m. on business days, gold prices are set at the London Bullion Market Association (London time). What currency is the gold rate set in? The gold fix is conducted in US dollars, British pounds, and Euros.
In India, who sets the gold price?
Because there is no such thing as a “kingmaker” in the Indian gold sector, gold prices are mostly established through an informal process. Gold rates in India are influenced by international prices, albeit they may not be identical to those in other countries. The Indian Bullion Jewellers Association, or IBJA, is a crucial player in deciding gold rates in India on a daily basis.
IBJA members include the country’s largest gold dealers, who have a collective say in setting pricing. These individuals represent nearly all of the legal gold sold and purchased in India, and they hail from all corners of this vast country. In India, gold is mostly imported by banks, which then sell it to bullion dealers around the country. Banks provide this gold to dealers after deducting their fee, which makes them slightly more expensive than the rate at which gold was imported.
The IBJA then begins the process of setting pricing by speaking with the country’s ten largest gold dealers. Depending on the rate at which they purchased gold, these dealers give their respective ‘buy’ and’sell’ quotes. IBJA then takes the average of these ‘buy’ and’sell’ bids and uses it to calculate the gold rate for a given day. This average rate has been adjusted for local taxes and a rate has been set as a result.
Dealers calculate their ‘buy’ and’sell’ rates by multiplying or adjusting the international cost of gold by the exchange rate of the Rupee, plus any import tariffs and taxes, such as VAT. Dealers make sure to include their margin in the rates they offer, taking into account their needs. This system assures that gold rates in India are in line with international trends, and buyers may buy gold without fear of being taken advantage of.
Is it better to purchase actual gold or invest in a Gold ETF?
- The simplest straightforward approach to buy gold is to obtain real bullion in the shape of bars or coins.
- However, with dealer fees, sales tax in some circumstances, storage charges, and security concerns to avoid theft, this can be costly.
- ETFs that track gold can be a more liquid and cost-effective option, particularly now that several funds with expense ratios as low as 0.17 percent are available.