A best price for Gold - Futures?

Any of our customers who are researching how to obtain a best price for gold may have come across the subject matter and term “Gold Futures”. Ever wondered what this term means?




A future is basically an arrangement to buy and/or sell gold for an arranged quantity and sum of money with rates decided in advance, but with a completion day in the future. That means payment is not immediately required and the seller does not have to deliver you any gold just yet either. Simples eh!

The payment day is when the actual trade happens - i.e.. when the purchaser pays, and the seller distributes the gold. It's typically up to 3 months in the future.

Futures traders utilise the deferral to allow them to speculate - both ways. The objective is to sell whatever they have acquired, or to buy back anything they have sold, before reaching the settlement day dependant on the buying and selling gold prices. Then they will only have to resolve their returns and shortfalls. The idea is that they can operate with much increased quantities, and take greater risks for greater profits than if they had to settle their deals directly upon initial agreement.

Sounds very risky to me……………

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