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Micro gold futures contracts are useful in bearish equity environments, where gold is showing its strength. It can serve as a portfolio stabilizer when markets are stressed. While the metal is not always immune to selling pressure, like when it sold off when the world went into “lockdown mode” in March 2020, it can outperform typical risk assets in these market environments.
With micro gold futures you have a greater ability to pinpoint scale, since the notional value is price times quantity, or 1890.00/oz X 10 Ounces. You can use them along side the 100 oz gold contract to control $250,000.00 of the metal. Here’s a great breakdown example of what that might mean for a trader like you:
Gold contracts provide global price discovery and opportunities for portfolio diversification by presenting an alternative to gold bullion, coins, and mining stock investments. Gold also offers ongoing trading opportunities, as gold prices respond quickly to political and economic events. Micro gold futures is 1/10th the size of the standard 100 troy ounce contract but, price action nearly mirrors it’s big brother 100% of the time.
Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.