Wisdom Financial - A Tradition of Excellence
Gold Futures and Options Information
Gold Futures and Options
Perhaps no other market in the world has the universal appeal of the gold market. For centuries, gold has been coveted for its unique blend of rarity, beauty, and near indestructibility. Nations have embraced gold as a store of wealth and a medium of international exchange; individuals have sought to possess gold as insurance against the day-to-day uncertainties of paper money.
COMEX Division gold futures and options provide an important alternative to traditional means of investing in gold such as bullion, coins, and mining stocks.
Gold futures contracts are also valuable trading tools for commercial producers and users of the metal. Commercial concentrations of gold are found in widely distributed areas: in association with ores of copper and lead, in quartz veins, in the gravel of stream beds, and with pyrites (iron sulfide). Seawater contains astonishing quantities of gold, but its recovery is not economical.
The greatest early surge in gold refining followed the first voyage of Columbus. From 1492 to 1600, Central and South America and the Caribbean islands contributed significant quantities of gold to world commerce. Colombia, Peru, Ecuador, Panama, and Hispaniola contributed 61% of the world's newfound gold during the 17th century. In the 18th century, they supplied 80%.
Following the California gold discovery of 1848, North America became the world's major gold supplier; from 1850 to 1875, more gold was discovered than in the previous 350 years. By 1890, the gold fields of Alaska and the Yukon were the principal sources of supply and, shortly afterwards, discoveries in the African Transvaal indicated deposits that exceeded even these. Today, the principal gold producing countries include South Africa, the United States, Australia, Canada, China, Indonesia, and Russia.
The United States first assigned a formal monetary role for gold in 1792, when Congress put the nation's currency on a bimetallic standard, backing it with gold and silver.
During the Great Depression of the 1930s, most nations were forced to sever their currency from gold in an attempt to stabilize their economies.
Gold formally reentered the world's monetary system in 1944, when the Bretton Woods agreement fixed all the world's paper currencies in relation to the U.S. dollar which in turn was tied to gold. The agreement was in force until 1971, when President Nixon effectively cancelled it by ending the convertibility of the dollar into gold.
Today, gold prices float freely in accordance with supply and demand, responding quickly to political and economic events.
Gold is a vital industrial commodity. It is an excellent conductor of electricity, is extremely resistant to corrosion, and is one of the most chemically stable of the elements, making it critically important in electronics and other high-tech applications.
A broad cross-section of companies in the gold industry, from mining companies to fabricators of finished products, can use the COMEX Division gold futures and options contracts to hedge their price risk. Furthermore, gold has traditionally had a role in investment strategies, and gold futures and options can be found in investors' portfolios.
Gold Futures Contract Specifications
Trading Unit
100 troy ounces.
Price Quotation
U.S. dollars and cents per troy ounce.
Trading Hours (All times are New York time)
Open outcry trading is conducted from 8:20 AM until 1:30 PM.
Electronic trading is conducted from 6:00 PM until 5:15 PM via the CME Globex® trading platform, Sunday through Friday. There is a 45-minute break each day between 5:15PM (current trade date) and 6:00 PM (next trade date).
Trading Months
Trading is conducted for delivery during the current calendar month; the next two calendar months; any February, April, August, and October falling within a 23-month period; and any June and December falling within a 60-month period beginning with the current month.
Minimum Price Fluctuation
$0.10 (10¢) per troy ounce ($10.00 per contract).
Last Trading Day
Trading terminates at the close of business on the third to last business day of the maturing delivery month.
Delivery
Gold delivered against the futures contract must bear a serial number and identifying stamp of a refiner approved and listed by the Exchange. Delivery must be made from a depository licensed by the Exchange.
Complete delivery rules and provisions are detailed in Chapter 113 of the Exchange Rulebook.
Delivery Period
The first delivery day is the first business day of the delivery month; the last delivery day is the last business day of the delivery month.
Exchange of Futures for Physicals (EFP)
The buyer or seller may exchange a futures position for a physical position of equal quantity. EFPs may be used to either initiate or liquidate a futures position.
Grade and Quality Specifications
In fulfillment of each contract, the seller must deliver 100 troy ounces (±5%) of refined gold, assaying not less than .995 fineness, cast either in one bar or in three one-kilogram bars, and bearing a serial number and identifying stamp of a refiner approved and listed by the Exchange. A list of approved refiners and assayers is available from the Exchange upon request.
Position Accountability Levels and Limits
Any one month/all months: 6,000 net futures equivalent, but not to exceed 3,000 in the spot month. Margin Requirements Margins are required for open futures positions.
Trading Symbol GC
If you would like to receive more information on Gold Futures and Options please call 800-854-8203 or fill out the form below and a representative will contact you today.
Futures and options trading involve substantial risk.
