I've noticed that many beginners get confused about how gold trading on futures markets actually works. Let's figure out what a gold futures contract is and how it operates in practice.

Basically, a gold futures contract is a forward contract where gold acts as the underlying asset. When you open a position, you're not buying physical metal but entering into an agreement for future delivery or settlement. The main parameters of the contract include margin requirements, delivery month, minimum price movement, daily price limits, and the method of execution.

To trade, you need to open an account with a broker that offers futures trading. Your profit or loss is calculated based on the difference between your entry and exit points. If you hold the contract until expiration, physical delivery of gold will occur.

The largest and most liquid gold market is COMEX in New York. There, they trade both standard contracts (100 ounces of 99.5% pure gold) and mini-versions (50 ounces). The minimum price increment is $0.25 per ounce. Interestingly, the exchange itself does not participate in trading but simply provides the platform and ensures both parties adhere to fair conditions. Trading is almost 24/7, only closed from 5:15 to 6:00 a.m. for settlements.

There is also an alternative — the Shanghai Futures Exchange. Here, one lot is one kilogram of gold, with leverage of about 7 times, and the minimum margin is 8% of the contract's value. Trading occurs day and night, supporting T+0 and two-way trading. The minimum price movement is 0.02 yuan per gram. However, during high volatility, they may temporarily change the requirements.

If you're seriously considering trading gold through futures, it's best to start by studying the specifications of a specific exchange and understanding what level of risk you're willing to accept.