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Gold daily report
Gold glossary
GOLD FUTURES
GOLD FUTURES CONTRACT SPECIFICATIONS
GOLD ETF

Gold ETFs allow investors to own gold and gain exposure to its price without the inconvenience (and risk) of storing physical gold bars or coins

FACTORS of GOLD FUTURES TRADING

Calculate the value of your gold today

Place in the first box your gold weight in grams.

In the second box place your golds karats.

Tthe result will give you the fair value of your gold based on the last spot price of gold



Gold breaking news

Gold will be at $5000 in two years, and that may be the low end of the range, claims Peter Schiff. Granted, we’ve already seen a spectacular run in the yellow metal over the past decade, but it’s going to accelerate even more from here as the pace of inflation begins to pick up. Not only that, but the government continues debasing the dollar faster and faster, so gold logically has nowhere to else to go – but up.
Gold daily report:

The gold price turned modestly lower on Friday, pressured by a stronger U.S. dollar and weakness in the broader commodities complex. The spot price of gold fell from an overnight high of $1,785.73 per ounce to as low as $1,772.41 this morning, while the U.S. Dollar Index (DXY) rose 0.2% to 79.735. The SPDR Gold Trust (GLD), the world’s most liquid gold price proxy, droped $0.48, or 0.3%, to $171.86 per share.

Today’s weakness in the gold price was tempered, however, by two worse than expected reports on the U.S. economy. Following yesterday’s disappointing data on GDP, Durable Goods, and Pending Home Sales, this morning the Chicago Purchasing Managers Index and University of Michigan Consumer Sentiment both came in below the consensus estimate among economists.
Despite today’s slight decline, the gold price remained up by 4.7% on a month-to-date basis. Furthermore, as the third quarter of 2012 draws to a close, the yellow metal has climbed 10.8% and on pace for its best such stretch since the second quarter of 2010.

However, since reaching a seven-month high of $1,790 last week, the price of gold has oscillated between gains and losses as investors’ focus has shifted from the Federal Reserve and QE3 back to the European sovereign debt crisis. Looking ahead, Mitsui Precious Metals analyst David Jollie commented that “The most obvious catalyst for gold to break higher this year is going to be good news out of Europe. Anything that is dollar negative is going to help gold move to fresh highs for the year.”

Jollie added that “To see resistance at the previous highs is not a major surprise. I think the market is still viewing this as period of consolidation, and not the end of a move.” Analysts at Barclays Capital noted that “A move above $1,788 in gold would confirm a base at $1,737 and open the $1,803 range highs.” The firm went on to say that “We are bullish and look for a break above there to open the $1,921 (all-time) highs.”

Societe Generale is “enthusiastic on gold” — so much so that in their latest cross-asset strategy report, they call “buy gold ahead of QE3” their number one strategy, saying it’s “the perfect asset to benefit” from additional loose monetary policy. 6/20/2012
Gold glossary

Gold/Silver Ratio: The number of ounces of silver required to buy one ounce of gold at current spot prices

Hallmark: A stamped impression on the surface of a precious metals bar that indicates the producer, serial number, weight, and purity of metal content.

Karat: A measure of the purity of gold. Pure gold is 24-karat.

What is Gold? A soft, shiny, heavy, malleable,and highly ductile transition metal that has long been used as a store of wealth and a standard for currencies worldwide. For centuries, gold has been used in coinage, jewelery, and in countless industrial applications.

Troy Ounce The Troy ounce is the traditional unit weight for precious metals, believed to be named after a weight used at the annual fair at Troyes in France in the Middle Ages. Conversion: 1 Troy ounce = 480 grains = 31.1035 grams = 1.09711 avoirdupois ounces.

Palladium: A rare silver-white metal of the platinum group. Palladium resembles platinum chemically and is extracted from some copper and nickel ores. It is primarily used as an industrial catalyst and in jewelry.

FINE OUNCE: Fine Ounce A descriptive measurement for ld which has a minimum purity of 99.5%

CUT-OFF GRADE: Cut-off Grade The lowest grade of ore at which it is profitable to mine, usually at the edge of an ore body or when the ore body is depleted.

Gold’s 10 worst days

The 10 worst days for gold, according to data compiled from futuresandoptions.gr:

-7.30% 6/13/2006
-5.83% 3/19/2008
-5.51% 8/05/1993
-5.37% 5/24/2006
-5.15% 12/01/2008
-4.85% 10/02/2008
-4.83% 10/24/1997
-4.41% 2/04/2010
-4.27% 10/22/2008
-4.23% 8/11/2008

18 karat, 14 karat, and 10 karat are common for gold jewelry. If your scrap gold is not stamped with a karat number, you may want a gold testing kit to confirm purity

GOLD FUTURES

A futures contract is a financial agreement to buy or sell a specified quantity of a certain commodity at a designated time in future, at an agreed price set at the time the contract is established.

Originally, gold futures contracts were designed to protect large industrial users of the precious metal from adverse price swings by enabling them to obtain or supply a steady quantity of gold at established prices – prices at which their respective businesses will be able to make a profit.

Members of the public buying futures are mostly speculators betting on the rise and fall of the price of gold. They buy gold futures when they believe that the price of gold will rise and sell them when they think it will fall. Gold futures traders don’t actually have to own or take delivery of the physical gold. By opting for cash settlement, they can just pay (or receive) the valuation difference in cash on delivery date.

The profit potential as well as the associated risk can be very high as futures trading account typically provide significant leverage. For example, the investor can control $50000 worth of gold by paying only $2500 upfront.

As the risk of trading gold futures can be very high, especially for those untrained in the intriques of options and futures trading. Investors are advised to exercise due caution if they wish to venture into this highly speculative endeavor. Less aggressive investors seeking to enter the gold market are recommended to stick to less risky means like buying gold ETFs or gold mining stocks.
Gold Futures Trading

Gold futures are traded in futures exchanges worldwide. Below is a summary of gold futures contracts traded in major futures exchanges worldwide.
Standard Gold Futures Contracts

Exchange

Symbol

Contract Size

Min. Price Fluctuation

Initial Margin

New York Mercantile Exchange (NYMEX)

GC

100 troy ounces

US$0.10 (10¢) per troy ounce, equivalent to $10.00 per contract

approx 5%,
subject to change.

Tokyo Commodities Exchange (TOCOM)

Not Available

1 kilogram (approximately 32.15 troy ounces)

JPY 1 per gram (1000 japanese yen per contract)

approx 5.5%,
subject to change.

Shanghai Futures Exchange (SHFE)

AU

1 kilogram (approximately 32.15 troy ounces)

RMB 1 per gram (1000 RMB per contract)

approx 7%,
subject to change.

Dubai Gold & Commodities Exchange (DGCX)

DG

32 troy ounces (approximately 1 kilogram)

US$0.10 per troy ounce (US$3.20 per contract)

approx 6.5%,
subject to change.

Multi Commodity Exchange (MCX)

GOLD

1 kilogram (approximately 32.15 troy ounces)

Re. 1 per 10 grams (Rs 100 per contract)

approx 4%,
subject to change.
Gold Mini-Futures

In recent years, gold mini-futures contracts were introduced by some of the major futures exchanges to make gold futures trading accessible to more people. The contract sizes of gold mini-futures are lower than their standard counterparts and consequently, their margin requirements are lower, making them attractive to gold futures traders who would like to speculate with less money.

Exchange

Symbol

Contract Size

Min. Price Fluctuation

Initial Margin

New York Mercantile Exchange (NYMEX)

QO

50 troy oz.

US$0.25 (25¢) per troy ounce ($12.50 per contract)

approx 5%,
subject to change.

Tokyo Commodity Exchange (TOCOM)

Not Available

100 grams (approximately 3.215 troy ounces)

JPY 1 per gram (100 japanese yen per contract)

approx 5.5%,
subject to change.

Multi Commodity Exchange (MCX)

GOLDM

100 grams (approximately 3.215 troy ounces)

Re. 1 per 10 grams (Rs 10 per contract)

approx 4%,
subject to change.

Gold futures contract

Specifications

Trading Unit
100 troy ounces.

Trading Hours
8:20 A.M. to 2:30 P.M. for the open outcry session. After-hours futures trading is conducted via the NYMEX ACCESS electronic trading system beginning at 4 P.M. on Mondays through Thursdays and concluding at 8 A.M. the following day. On Sunday, the electronic session begins at 7 P.M. All times are New York time.

Trading Months
Trading is conducted for delivery during the current calendar month, the next two calendar months, any February, April, August, and October thereafter falling within a 23-month period, and any June and December falling within a 60-month period beginning with the current month.

Price Quotation
Dollars and cents per troy ounce. For example: $282.70 per troy ounce.

Minimum Price Fluctuation
Price changes are registered in multiples of 10¢ ($0.10) per troy ounce, equivalent to $10 per contract. A fluctuation of $1 is, therefore, equivalent to $100 per contract.

Maximum Daily Price Fluctuation
Initial price limit, based upon the preceding day’s settlement price is $75 per ounce. Two minutes after either of the two most active months trades at the limit, trades in all months of futures and options will cease for a 15-minute period. Trading will also cease if either of the two active months is bid at the upper limit or offered at the lower limit for two minutes without trading. Trading will not cease if the limit is reached during the final 20 minutes of a day’s trading. If the limit is reached during the final half-hour of trading, trading will resume no later than 10 minutes before the normal closing time. When trading resumes after cessation of trading, the price limits will be expanded by increments of 100%.

Last Trading Day
Trading terminates at the close of business on the third to last business day of the maturing delivery month.

Delivery
Gold delivered against the futures contract must bear a serial number and identifying stamp of a refiner approved and listed by the Exchange. Delivery must be made from a depository located in the Borough of Manhattan, New York City, licensed by the Exchange.

Delivery Period
The first delivery day is the first business day of the delivery month; the last delivery day is the last business day of the delivery month. Exchange of Futures for, or in Connection with, Physicals (EFP) The buyer or seller may exchange a futures position for a physical position of equal quantity. EFPs may be used to either initiate or liquidate a futures position.

Grade and Quality Specifications
In fulfilment of each contract, the seller must deliver 100 troy ounces (Æ5%) of refined gold, assaying not less than .995 fineness, cast either in one bar or in three one-kilogram bars, and bearing a serial number and identifying stamp of a refiner approved and listed by the Exchange. A list of approved refiners and assayers is available from the Exchange upon request.

Position Limits
Position accountability level of 7,500 contracts. Includes gold futures and options on a net futures equivalent basis. Spot month limit of 3,000 contracts from the beginning of the last business day prior to the delivery month.

Margin Requirements
Margins are required for open futures and short options positions. The margin requirement for an options purchaser will never exceed the premium paid. Trading Symbols

Description

Perhaps no other market in the world has the universal appeal of the gold market. For centuries, gold has been coveted for its unique blend of rarity, beauty, and near indestructibility. Nations have embraced gold as a store of wealth and a medium of international exchange; individuals have sought to possess gold as insurance against the day-to-day uncertainties of paper money.

COMEX Division gold futures and options provide an important alternative to traditional means of investing in gold such as bullion, coins, and mining stocks.

Gold futures contracts are also valuable trading tools for commercial producers and users of the metal. Commercial concentrations of gold are found in widely distributed areas: in association with ores of copper and lead, in quartz veins, in the gravel of stream beds, and with pyrites (iron sulfide). Seawater contains astonishing quantities of gold, but its recovery is not economical.

The greatest early surge in gold refining followed the first voyage of Columbus. From 1492 to 1600, Central and South America and the Caribbean islands contributed significant quantities of gold to world commerce. Colombia, Peru, Ecuador, Panama, and Hispaniola contributed 61% of the world’s newfound gold during the 17th century. In the 18th century, they supplied 80%.

Following the California gold discovery of 1848, North America became the world’s major gold supplier; from 1850 to 1875, more gold was discovered 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.

The United States first assigned a formal monetary role for gold in 1792, when Congress put the nation’s currency on a bimetallic standard, backing it with gold and silver.

During the Great Depression of the 1930s, most nations were forced to sever their currency from gold in an attempt to stabilize their economies.

Gold formally reentered the world’s monetary system in 1944, when the Bretton Woods agreement fixed all the world’s paper currencies in relation to the U.S. dollar which in turn was tied to gold. The agreement was in force until 1971, when President Nixon effectively cancelled it by ending the convertibility of the dollar into gold.

Today, gold prices float freely in accordance with supply and demand, responding quickly to political and economic events.

Gold is a vital industrial commodity. It is an excellent conductor of electricity, is extremely resistant to corrosion, and is one of the most chemically stable of the elements, making it critically important in electronics and other high-tech applications.

A broad cross-section of companies in the gold industry, from mining companies to fabricators of finished products, can use the COMEX Division gold futures and options contracts to hedge their price risk. Furthermore, gold has traditionally had a role in investment strategies, and gold futures and options can be found in investors’ portfolios.

GOLD ETF

A gold ETF is a special type of exchange traded fund that is designed to track the price of gold. Gold ETFs are open ended mutual funds fully backed by insured physical gold bullions. They are traded on the major stock exchanges including London, New York and Singapore.

Gold ETFs allow investors to own gold and gain exposure to its price without the inconvenience (and risk) of storing physical gold bars or coins. Each certificate or share entitles the holder an ownership to a specific amount of gold.

To pay for management fees and also for the storage and insurance of the physical gold, a small amount of gold is sold periodically. Hence, the amount of gold represented by each certificate decline over time.

Gold ETFs or GETFs are grouped under the name Exchange Traded Gold.

goldbars

Streettracks Gold Shares (NYSE: GLD and SGX: GLD 10US$ )

Gold Bullion Securities (ASX: GOLD)

Lyxor Gold Bullion Securities (LSE: GBS and Euronext: GBS)

Like all securities, there is a commission (typically around 0.4%) for buying or selling gold ETFs. In some countries, investing in gold ETFs is a way to avoid the sales tax or the VAT which would apply when buying physical gold coins and bars.

Factors of Gold Futures Trading

Changes in supply in the form of annual mine production; whether production is being exceeded or even met. Too, news at any time from exploration companies depending on its nature. A common factor often overlooked too is the technology being employed to extract the ore and who has, or will be able to gain access to it.

Changes in demand, in the form of, on the larger scale; countries wishing to increase their reserves of gold stocks such as China and Russia in more current years. While on the consumer level for specific products like jewelry, and electronics and all those with high current or perceived demand, in conjunction with the amounts at which these goods are or will be produced (also the realization of successful developments in areas of gold nanoparticle applications that may arise such as for the treatment of cancer, and for newer electronics.)

The amounts of gold that are being hoarded can also affect trading. As can the amount of increase in speculation that occurs in the market, which tends to heighten demand.

Since gold can act as a hedge against inflation, the value of the dollar (price of gold usually increases with a loss in the dollars value) and currencies can also play an important role in trading. As can expected upturns or downturns in the economy, politics, the stock market, and worldwide crisis and events on the news front, such as the output of crude and the status or news on any wars.

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