Gold has been coveted for centuries for its unique blend of rarity, beauty, and near indestructibility. The Egyptians mined gold before 2,000 BC. The first known pure gold coin was made on the orders of King Croesus of Lydia in the sixth century BC.
Following the California gold discovery of 1848, North America became the world’s major gold supplier. From 1850 to 1875, more gold was discovered here than in the previous 350 years. By 1890, the gold fields of Alaska and the Yukon were the principal sources of supply and, shortly afterwards, discoveries in the African Transvaal indicated deposits that exceeded even these. Today, the principal gold producing countries include South Africa, the United States, Australia, Canada, China, Indonesia, and Russia.
Gold is found in nature in quartz veins and secondary alluvial deposits as a free metal. Because it is virtually indestructible, much of the gold that has ever been mined still exists above ground in one form or another.
Gold is a vital industrial commodity. Pure gold is one of the most malleable and ductile of all the metals. It is a good conductor of heat and electricity. The prime industrial use of gold is in electronics. Another important sector is dental gold where it has been used for almost 3,000 years. Other applications for gold include decorative gold leaf, reflective glass, and jewelry.
In 1792, the United States first assigned a formal monetary role for gold when Congress put the nation’s currency on a bimetallic standard, backing it with gold and silver. Under the gold standard, the U.S. government was willing to exchange its paper currency for a set amount of gold, meaning the paper currency was backed by a physical asset with real value. However, President Nixon in 1971 severed the convertibility between the U.S. dollar and gold, which led to the breakdown of the Bretton Woods international payments system. Since then, the prices of gold and of paper currencies have floated freely. U.S. and other central banks now hold physical gold reserves primarily as a store of wealth.
The Gold futures contract trades on Globex, the CME Group electronic exchange after it acquired the New York Mercantile Exchange (NYMEX) and Commodity Exchange, Inc (COMEX) in 2008. The market trades Sunday through Friday from 5:00 PM CT to 4:00 PM CT the following day.
One Gold futures contract is 100 fine troy ounces. The most common contract symbol is GC.
One Gold futures contract price increment or “tick” is $0.10 per troy ounce. A one “tick” move is $10. Therefore a full dollar move, 1088.0 to 1089.0, for example, is $100.
The performance bond or initial margin requirement to initiate one futures contract is $4,125 (as of November 11, 2015). To control that futures contract going forward the maintenance margin becomes $3,750 (as of November 11, 2015).
The Gold futures contract month listings are the current calendar month (for delivery purposes) plus the next two months. Any February (G), April (J), August (Q), and October (V) within 23 months of the current calendar month. Any June (M) and December (Z) within 72 months of the current calendar month.
The Gold futures contract’s Last Trading Day (LTD) is the third to last business day of the delivery month. The December 2015 Gold futures contract LTD is December 29, 2015 for example. The First Notice Day (FND) is November 30, 2015.
The Gold futures active month is settled by CME Group staff based on trading activity on CME Globex between the settlement period of 12:29:00 to 12:30:00 Central Time (CT),. The active month is the nearest base contract month that is not the current delivery month. The base months for Gold futures are February (G), April (J), June (M), August (Q) and December (Z).
The Gold futures contract is deliverable and may take place on any business day beginning on the first business day of the delivery month or any subsequent business day of the delivery month, but not later than the last business day of the current delivery month.
This particular market trades virtually around the clock (including while the European markets are trading from roughly 2:00 AM CT to 10:30 AM CT and Asian markets are trading from roughly 5:00 PM CT to 2:00 AM CT) and is susceptible to outside markets and fundamental influences.
Visit www.danielstrading.com for additional contract specifications and market information regarding the Gold futures market.
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