In the past, gold investment was a simple transaction that required physical possession of the commodity. However, over time, the gold market has evolved to include new options to invest in the precious metal. Gold prices, which combine current gold market with principles of futures trading, are one way to trade it. With gold futures investments, it is...
The term "future" refers to a transaction to exchange gold at a predetermined price and quantity, but with a future settlement date. As a result, neither you nor the seller are required to make a full payment at this time (at minimum not in full). That's all there is to it. In other words, the day of settlement...
The gold futures trading is one of many commodity futures markets where contracts are made to purchase gold at a specific price at a specific future date. Both gold producers but also market makers use gold futures to protect their products from market fluctuations, and speculators use gold futures to profit from those same market movements.
Future delivery of a metal at an agreed-upon price is guaranteed by a legally binding contract for the purchase of precious metals futures. A futures exchange standardises the contracts in terms of quantity, quality, delivery date/time, and location. It is only the cost that can change.
