What are Metals futures?
Metals futures are standardized contracts for the purchase and sale of metal commodities for future delivery at predetermined prices. These contracts provide essential tools for price discovery and risk management in global metals markets, serving producers, consumers, investors, and speculators worldwide.
Types of Metals Futures
Precious Metals
Gold Futures (GC)
- Contract size: 100 troy ounces
- Quoted in U.S. dollars and cents per ounce
- Minimum price fluctuation: 10 cents per ounce ($10 per contract)
- Primary uses: Store of value, inflation hedge, portfolio diversification
Silver Futures (SI)
- Contract size: 5,000 troy ounces
- Quoted in U.S. dollars and cents per ounce
- Tick value: $25 per contract (0.5 cents per ounce)
- Average true range: Typically larger moves than other contracts
Platinum and Palladium
- Important for automotive catalytic converters
- Industrial applications in electronics and jewelry
- Supply concentrated in specific geographic regions
Industrial/Base Metals
Copper Futures (HG)
- Contract size: 25,000 pounds
- Known as "Dr. Copper" for its economic forecasting ability
- Key applications: Construction, electrical wiring, plumbing
- Economic indicator due to widespread industrial use
Aluminum, Zinc, Nickel
- Essential for manufacturing and construction
- Used in automotive, aerospace, and technology industries
- Supply/demand influenced by global industrial production
Key Market Characteristics
Contract Specifications
Metals futures can trade as standard, mini and micro products, and metals futures contracts generally specify:
- Quality standards - Acceptable grades and purities
- Delivery locations - Approved warehouses and depositories
- Contract size - Standardized quantities for efficient trading
- Delivery months - Specific expiration and delivery dates