Trading Gold Futures Contracts

What does Gold Futures contract means

Gold Future contract is a legally binding agreement for delivery of gold in the future at a agree-upon price. These type of Gold Futures contracts are standardized by Gold Futures exchange as to quantity, quality, time and place of delivery i.e physical delivery will be with the difference between the Gold Future price at the time of contract and actual price at the time of delivery.

Market Participants facilitate trading without Physical delivery of Gold Futures

Market participants or hedgers use these type of contracts as a way to manage their purchase or sale of physical with providing speculators or investors with an opportunity to participate in the markets and trade Gold Futures without any physical backing, but only with agreed upon the price with a difference of opening and closing of a trade of Gold Futures.

Why Gold Futures or any Other Precious Metals Futures

There are few aspects that need to be cover and one of them is that Precious metals Gold Futures or Silver Futures are traded over centralized exchanges and because of the centralized exchanges, Gold or silver futures offers more financial leverage, flexibility and financial integrity than trading Gold Futures with the contracts. Let me emphasis on the point more that Financial leverage is the ability to trade and manage the high market value product like Gold Futures with a fraction of total value. Trading Futures contracts is done with performance margin. It requires considerably less capital that the physical market and because there is high leverage used in Currency Market and it provides speculators a higher risk/high return investment.

Bias of Gold Futures Remains on the downside-Technical outlook for the week May30-June3

Weekly outlook for Gold Futures as We can expect bit of choppy sessions in this week due to two huge release scheduled at the weekend and i.e ECB policy decisions and NFP data. We can see risk falling through if there is any unexpected policy decisions being made by ECB bank officials and followed by Big change in participation rate in coming event of NFP data which is scheduled to released this Friday and the last NFP report before then next FED meet scheduled to release later this month. Any change in Unemployment rate up or down would certainly put risk at glance and drive Gold Future prices with volatility.

:: sell Gold Futures @1212 with stops around 1229.
::First Target 1200
::Second Target 1182

I always advice setting two pending orders and expiry is 48 hours. Close one order around 1200 and trail the rest around 1216 with risking 16 points to make another 16

Trade watch Gold Futures

After First Target was reached and profits were booked, waiting for the second target and stop out at break even of the second lot.