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Trading Gold and Silver Futures Contracts

Gold and silver futures contracts can offer a hedge against inflation, a speculative play, an alternative investment class or a commercial hedge for investors seeking opportunities outside of traditional equity and fixed income securities.

In this article, we’ll cover the basics of gold and silver futures contracts and how they are traded, but be forewarned: trading in this market involves substantial risk, which could be a larger factor than their upside return profiles.

Key Takeaways

  • Investors looking to add gold and silver to their portfolio may want to consider futures contracts.
  • With futures, you don’t need to actually hold physical metal and you can leverage your purchasing power.
  • Holding futures has no management fees that might be associated with ETFs or mutual funds, and taxes are split between short-term and long-term capital gains.
  • You will, however, need to roll your futures positions over as they expire, otherwise you can expect delivery of physical gold.

What Are Precious Metals Futures Contracts?

Advantages of Futures Contracts

Futures Contract Specifications

Gold Futures

Silver Futures

Hedgers and Speculators in the Futures Market

The Bottom Line

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