Gold Contract History
If you are interested in trading gold futures it is helpful to become familiar with the history of
the gold market. 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%.
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.
NYMEX Metals Complex
Click on the link above to download a very informative .pdf brochure entitled "Metals
Complex". It was published by the New York Mercantile Exchange. This is a must read guide for any speculator or hedger
considering an trade in the gold futures or gold options.
Click here to contact a commodities broker with experience in the gold market.