Gold Futures and Options Contracts give local investors access to the international gold price as determined by the New York Mercantile Exchange (NYMEX) through its Commodity Exchange (COMEX) division, a subsidiary of the CME Group. This highly liquid precious metal contract is cash settled in rands and can easily be accessed through JSE Commodity Derivatives members.
These contracts are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from a favourable price movement.
Who is this for?
Gold is primarily bought as an anti-inflation hedge. It is also used jewellery and for industrial use. These contracts can be effectively used by commercial consumers, producers and fabricators of gold with a view to managing price risk. Producers can employ a short hedge and end-users can use a long hedge. Speculators also use these contracts to profit on short-term movements in the Futures Contract price.
- Offers ongoing trading opportunities, as gold prices respond quickly to political and economic events.
- Serves as an alternative to investing in gold bullion, coins and mining stocks.
- Enables effective price risk management and the evaluation of current and future world supply and demand.
- Enables identification of short- and long-term price and volatility patterns.
- Hedge or gain exposure based on expectation of directional price, spread movement or volatility in gold.
- Enables portfolio diversification.
- Gold prices are sensitive to political and economic uncertainty, interest rates and currency valuations, which pose downside risks that can lead to significant losses.
- Can be volatile.
How to get Gold Futures and Options
To access this product, register as a client with an authorised JSE member firm, deposit the required initial margin and sell or buy according to your needs.
- No limits apply to individuals, foreigners or corporate entities.
- Pension funds and long-term insurance companies are subject to their 25% foreign allocation limits.
- Asset managers and registered collective investment schemes are subject to their 35% foreign allocation limits.
- For all the details about qualifying factors, speak to your broker.