What is the Purpose of the Gold Futures Market?
In much the same way that farmers hedge the price of their crops and their buyers hedge their purchases with futures, the gold futures market is used by both gold producers and the movers of gold to hedge their gold against market price fluctuations.
In addition, they can also be used by speculators and traders as a way to make money off of gold price movements. In fact and for those who trade futures, small gold price movements can translate into substantial gains or losses. Hence, one should thoroughly understand how gold futures work before they consider investing in or trading them.
To learn more about gold futures and futures in general, check out the CME Group’s Gold Education page as well as the homepage of Futures magazine, a US-based monthly magazine about commodity futures contracts, stocks, options, derivatives and Forex.