What are Gold Futures?
Gold is considered a safe, yet highly attractive investment asset, specially whenever global markets suffer from instability.
At various times, it acts as an inflation hedge, reserve, and basis for various currencies, making it a crucial asset in today’s monetary system. However, gold prices can be extremely volatile, which is why gold futures have come into existence—to help market participants and speculators manage gold prices.
Gold futures help producers and marketers to manage the risk of price fluctuations in the gold market. A gold future is a standardized contract that is traded on an exchange between two parties. The buyer of the contract agrees to accept delivery of a specified quantity of gold at a predetermined price at a future specified date. The seller agrees to supply such a quantity as per the contract.
Gold futures are one of the most active and liquid markets in the world.