Comex Gold Futures: Contract of the Week

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Gold’s one of the world’s oldest measures of value. It’s also one of of the most actively traded commodities, thanks to CME’s Comex Gold Futures.

These contracts use the symbol root GC and track 100 troy ounces of gold. That means every point represents $100 of change in clients’ accounts for each contract.

Some traders might wonder, what’s the point of gold, now that we’re in an age of electronic payments and cryptocurrencies? Here are a few justifications, even if you’re skeptical of a metal John Maynard Keynes called a “barbarous relic.”

The first possible reason is that gold is still a major commodity for jewelry and electronics. Central banks also continue to use it as foreign reserves.

CME Comex Gold Futures current contract, with Matrix and hourly chart.

Second, gold has a certain emotional value representing fear. Worried about a recession or global war? Investors often respond by purchasing gold.

Next, gold can move in relation to other assets like currencies or bonds. Generally, a strong U.S. dollar hurts gold and a weak greenback boosts it. That’s because the yellow metal is priced in dollars, giving them an inverse relationship.

Another argument is that gold’s an inflation hedge because the Federal Reserve cannot print more gold coins. During times when prices start to rise, like the 1970s and the last decade, gold tends to outperform stocks. Periods of low inflation, like the 1990s, can be just the opposite.

Finally, gold still fluctuates a lot in price. That alone creates opportunities to play the upside or downside.

Gold vs. Other Futures

Like other futures, traders can go long to profit from a rally, or short to catch a drop. They must have an initial amount of margin on hand to enter and a certain amount to keep the position open. (See details below.)

Still, there are some differences from other contracts like S&P 500 E-minis and Nasdaq-100 E-minis. Gold futures expire every other month, not quarterly. And, like WTI crude oil contracts, they have physical delivery. Their trading schedule also varies a little.

Here are the key details for CME’s Comex Gold Futures:

  • What it tracks: 100 troy ounces of gold
  • How it tracks it: $100 per point, $10 per 0.10 point.
  • When it trades: Sunday at 6 p.m. ET through Friday at 5 p.m. ET. Each day it halts trading between 5 p.m. ET and 6 p.m. ET.
  • Capital required during the normal session: $1,870 to enter, $1,700 to hold. (Subject to change.) This is based on the $3,740 initial margin requirement and the $3,400 maintenance margin.
  • Expiration: The third-to-last trading days of February, April, June, August, October, December.
  • Continuous contract symbol: @GC

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