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Gold and Micro Gold Futures Contracts Report

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Updated: Jun 18th, 2022

One of the ways to acquire gold is by signing a futures contract on an exchange. Futures contracts are used for agreements to purchase an asset at a certain point in the future. Any form of investing is a high-risk venture, which can result in substantial financial losses. To reduce the probability of large-scale expenditures and attract investment in gold, CME Groups introduced Micro Gold futures contracts.

Micro-Gold contracts are similar to the standard Gold futures contracts. They are as safe and secure as their larger counterparts. Micro Gold contracts are one-tenth the size of the one hundred’s ounce Gold futures contract (Micro Gold Futures Contract Specs). The price of one Micro Gold futures contract comprises ten troy ounces. Smaller size contracts can suit trading strategies or capital reliability better. Micro Gold contracts are products facilitating cross-margining opportunities, meaning lesser financial requirements for maintaining an account.

Investors buying Micro Gold futures employ the same techniques, which are used for Gold futures contracts. Both derivatives are sold and bought at the same rate, thus it is possible to make conclusions about Gold futures’ position on the market by looking at the Micro Gold graphs. The later are traded at COMEX almost twenty-four/seven, while Gold contracts are also available on other exchanges. It is also beneficial for investors who want to fine-tune gold exposure or start trading with smaller capital.

Overall, Micro Gold futures contracts suit beginning investors or those who want to diversify their portfolios. Unlike other futures contracts, which are more restrictive in time frame and contract units, Micro Gold contracts are more flexible. With a lower risk of capital losses, they offer investors higher security and lower maintenance costs. Being a new addition on the market, they are likely to grow, although they will remain dependent on classic gold contracts.

Reference

Micro Gold Futures Contract Specs. (n.d.). CME Group. Web.

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IvyPanda. "Gold and Micro Gold Futures Contracts." June 18, 2022. https://ivypanda.com/essays/gold-and-micro-gold-futures-contracts/.

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IvyPanda. 2022. "Gold and Micro Gold Futures Contracts." June 18, 2022. https://ivypanda.com/essays/gold-and-micro-gold-futures-contracts/.

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IvyPanda. (2022) 'Gold and Micro Gold Futures Contracts'. 18 June.

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