Gold is one of the most highly sought-after metals, being known for its intrinsic value and allure as a safe-haven asset. This makes trading Gold Futures a rewarding endeavour for investors seeking exposure to the dynamic and often lucrative gold market.
However, navigating the complexities of gold futures trading requires a thorough understanding of the key factors that influence gold futures.
In this article, we explore five crucial factors that traders should consider when trading gold futures, providing insights to help them make informed decisions and maximize their trading success.
For more information about Gold Futures, find out more about How Worthy Is Gold in 2024 and 5 Things to Know About Gold Futures.
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Exchanges that Offer Gold Futures
Being one of the valuable metals in the world, Gold Futures Contracts are traded in many different exchanges. This ranges from Gold Perpetual Futures Contract to Micro Gold futures and E-mini Gold futures.
To trade Gold Futures, traders need to be aware of the different Gold Futures contracts traded on the different exchanges and their contract specifications.
To trade Gold Futures, traders can utilize Orient Futures Singapore, a reputable broker based in Singapore. Orient Futures Singapore is an expert investor Singapore broker and a Monetary Authority of Singapore MAS regulated forex broker. Trading with a regulated broker is crucial as it helps prevent unsuspecting traders from falling victim to forex trading scams perpetrated by unscrupulous companies.
Here are the different exchanges and the gold futures contracts that they offer:
APEX Gold Futures
The Asia Pacific Exchange (APEX) offers Gold Perpetual Futures Contract that traders can trade through Orient Future Singapore.
Orient Futures Singapore currently hold membership to APEX, which would make trading Gold Futures more accessible.
COMEX Gold Futures
The New York Mercantile Exchange Comex Division (COMEX) offers Gold Futures, Gold TAS Futures, E-mini Gold Futures, and Micro Gold Futures.
Comex Gold Futures Symbol: GC
DGCX Gold Futures
The Dubai Gold and Commodities Exchange (DGCX) offers Gold Futures and India Gold Quanto Futures.
DGCX Gold Futures Symbol: DG
The India Gold Quanto Futures is a futures contract that derives its value from the price of gold but is settled in Indian Rupees (INR). This unique feature enables traders to participate in speculating on the price of gold without being impacted by exchange rate fluctuations between the Indian Rupee and the US Dollar (USD).
JPX Gold Futures
The Osaka Exchange Incorporated (JPX) offers Gold Standard Futures and Gold Mini Futures.
TFEX Gold Futures
The Thailand Futures Exchange (TFEX) offers 10 Baht Gold Futures, 50 Baht Gold Futures and Gold Online Futures.
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Trade Gold For Gold with APEX Gold Perpetual Futures
From 1st April to 28th June 2024, clients who trade the minimum volume a qualifying amount of Gold Perpetual Futures on the Asia Pacific Exchange (APEX) through Orient Futures Singapore, will be able to receive a PAMP Gold Bar. *
Please note that only the contract codes in Table 1 below are eligible for the Campaign:
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Contract code |
Contract description |
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Gold 1 Troy Ounce Perpetual Futures |
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Gold 10 Troy Ounce Perpetual Futures |
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Gold 100 Troy Ounce Perpetual Futures |
Table 1: Eligible contract codes
*Terms and Conditions apply.
Please refer to the table below for qualifying amounts:
Figure 1. APEX Gold Perpetual Futures Trading Volume Criteria
Click here to start trading to receive Gold now!
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APEX Perpetual Gold Futures Contract Specifications
The APEX Perpetual Gold Futures Contract has the following specifications:
The Futures Contract has a minimum price fluctuation of US $0.10/troy ounce.
The last trading day of the contract month is not applicable as there is no maturity date.
APEX Perpetual Gold Futures symbol: AUP1/ AUP10/ AUP100
APEX Trading Hours are as follows (LBMA Gold Price AM Publication Day):
T Session:
06:55hr - 06:59hr (Pre-opening Session)
06:59hr - 07:00hr (Opening Match Session)
07:00hr - 18:00hr (Day Session)
T+1 Session:
20:25hr - 20:29hr (Pre-opening Session)
20:29hr - 20:30hr (Opening Match Session)
20:30hr - 05:00hr (Night Session)
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Factors That Affect Gold Futures Price
To trade Gold Futures effectively, it is essential that traders grasp the critical factors influencing gold prices. Comprehending these factors is indispensable for traders aiming to navigate the constantly shifting terrain of gold prices.
Federal Reserve Policies and Interest Rates
The Federal Reserve, the central bank of the United States, wields significant influence over gold prices. They do this through its monetary policies and decisions on interest rates. Changes in interest rates can affect the opportunity cost of holding gold. This is due to higher interest rates may prompt investors to favour interest-bearing assets over non-yielding gold. Additionally, the Fed's stance on economic conditions and inflation expectations can influence demand for gold as a hedge against inflation or economic uncertainties.
According to Forbes, the United States Federal Reserve is currently expected to cut interest rates by a little more than 1% over the course of its seven remaining scheduled meetings in 2024. Consequently, short-term interest rates could hover around 4% by December 2024, based on market forecasts. The bulk of these rate cuts may occur in the latter half of the year.
This potential decrease in interest rates is spurred by inflation edging closer to the Fed’s target of 2% annually. This trend suggests that a less stringent monetary policy may be suitable in response to this moderation in inflation.
The Federal Reserve's decision to lower interest rates can have a significant impact on gold prices. Generally, when the Fed raises lower rates, it makes borrowing less expensive. This can lead to increased economic activity and higher returns on alternative investments, reducing the appeal of non-yielding assets like gold. Consequently, gold prices tend to decline in response to lower interest rates as investors seek higher-yielding opportunities elsewhere.
US Dollar Strength and Currency Fluctuations
Since gold is measured in US dollar, the strength of the US dollar directly affects the price of gold. However, Gold and the US dollar also share an inverse relationship.
While a higher interest rate can strengthen the US dollar, the increased price of gold in US dollars makes it more expensive for investors in other currencies. Consequently, this could potentially lead to a decrease in demand for gold. This might then result in a price decrease to address the lack of demand. Conversely, a weaker dollar can boost global demand for gold, raising its prices.
Currency fluctuations and exchange rate movements also impact gold's appeal for international investors, particularly during times of currency devaluation or uncertainty.
According to Orient Futures Weekly Data Report on Precious Metals dated 04022024, the 10-year US Treasury yield fell to 4.02%, inflation expectations retreated to 2.21%, real interest rates fell to 1.81%.
The US dollar index rose 0.47% to 103.9, the S&P 500 index rose 1.38%, the Chinese yuan depreciated, and the Shanghai gold maintained a premium.
Demand and Supply of Gold
The fundamental principles of demand and supply play a vital role in determining gold prices. The more demand outweighs the supply, the higher the price of gold.
Demand for gold is driven by various factors. This includes investor sentiment, geopolitical tensions, and economic uncertainties. Geopolitical conflicts and global economic downturns often spark a flight to safety, driving up gold demand. On the supply side, gold mining and production levels, as well as central bank gold reserves and recycling, influence the overall availability of gold in the market.
Orient Futures Weekly Data Report on Precious Metals dated 04022024 reported that the US economic data of demand of gold has been mixed, but overall performance exceeded expectations.
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Price of Gold Futures Forecast
According to J.P. Morgan, gold prices are expected to reach a peak of $2,300 per ounce in 2025. This projection is based on the assumption of a Fed cutting cycle, which is expected to initially result in a reduction of 125 basis points (bp) over the second half of 2024, thereby driving gold prices to new nominal highs.
Forecasts for future gold prices rely on Fed official projections, which J.P. Morgan anticipates core inflation moderating to 2.4% in 2024 and further decreasing to 2.2% in 2025, before returning to the targeted 2% level in 2026.
J.P. Morgan predicts that by the second quarter of 2024, U.S. growth will decelerate to 0.5% quarter-on-quarter. This slowdown is expected to prompt the Fed to commence rate cuts in June, eventually delivering a total reduction of 125 bp in the latter half of the year in order to mitigate the risk of a recession.
Click to find out about the Gold Price Today.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
