Gold and Silver Futures

Course 12 of 60 in the futures hub. Gold and silver futures are a dollar-and-real-rate trade sitting on a contract spec. Here's how GC and SI price out in ounces and ticks, when Globex is open, and when you have to be out before delivery.

Dollar and real rates move the metal

Gold doesn't need a jewelry story to reprice. It tends to move when the dollar moves, and when the interest rate after inflation, the real rate, moves. The account-killer is a GC stop borrowed from a calm stock-index future and then held through a dollar swing or a data morning.

Write the driver you think is in charge before you pick a size: dollar, real rate, or a short squeeze. If the note is blank, you're trading a line on a screen. Spot currencies feel that same dollar without a delivery month, and the forex course stays on that side of the business.

1. What one GC contract covers

One GC is 100 troy ounces. The minimum step is $0.10 an ounce, so one step is $10 on the contract, and a one-dollar move in the quote is $100. The diagram's round picture is $2,400 an ounce. 100 times 2,400 is $240,000 of gold standing behind a single contract. That figure is the exposure. Margin is only the deposit the clearing firm holds against it, and the firm can raise the deposit when the metal gets wild.

Micro gold exists because $240,000 is a lot of metal. MGC is 10 troy ounces, and the same $0.10 step is $1 on the micro. Ten MGC cover the same 100 ounces as one GC. Whether margin and fees scale down by a neat tenth is a question for your broker's current sheet. I won't print a margin number. It changes, and whatever I wrote here would be stale by the afternoon.

2. Silver is sized on its own multiplier

Silver is the noisy cousin, and the spec says so before any chart does. SI is 5,000 troy ounces. The outright minimum step is $0.005 an ounce, which is $25 a contract. A one-dollar change in the silver quote is 5,000 times $1, or $5,000 on one contract. The same one-dollar change in gold is $100. That doesn't mean silver moves a dollar when gold does. It means a gold stop copied onto silver in quote points is a different bet before the market does anything at all. Silver isn't a gold contract with a new ticker.

GC tick: $0.10 an ounce times 100 ounces = $10. A 15-tick stop is 15 times $10 = $150. A $142 loss cap divided by $150 is under 1, so the GC count is 0. Micro gold is $1 a tick, so the same 15 ticks cost $15, and $142 divided by $15 is 9 MGC with $7 left (9 times $15 = $135). An FOMC day isn't a 15-tick plan unless the plan already says so.

Nine MGC only works if 15 ticks still fits the day you're actually in. The FOMC holds eight regularly scheduled meetings a year, on a calendar you can read ahead of time. Gold can reprice hard when the statement hits. If that morning needs more than 15 ticks, widen the stop and cut the count again, or stand aside. Before the statement, while the price is still boring, run GC with your own cap and stop through the futures contract size calculator. It has the $10 gold tick built in. It doesn't list micro gold, so do the MGC line by hand at $1 a tick. Silver also has a finer step for spreads and settlement, $0.001 an ounce. Times 5,000 ounces that's $5 a contract, against $25 for an outright tick. Check the current COMEX silver spec before you lean on the $5 number.

3. The sticker price and the real rate

Spot gold can print higher and still tell you nothing useful. Up days get blamed on a safe bid. Often the thing that actually moved was real yields falling, the dollar falling, or a squeeze. Those are different trades. A yield-driven pop can give it all back on the next data print. A squeeze can die the hour the forced buying stops. Write which one you think you're in, in the same note as the size.

Real yields are nominal rates with inflation taken off. Today's figure comes from the day's data, so look it up rather than guess. What you can do is refuse the trade when the sticker and the driver disagree with the note from last night. A Fed morning and the big scheduled U.S. numbers are when that disagreement shows up in minutes. If the note no longer matches the screen, the old ticket is done and any new ticket needs its own dollars.

4. COMEX hours and the London pool

GC on Globex runs from 5:00 pm Central Sunday through 4:00 pm Central Friday, with trading paused for an hour from 4:00 pm Central, Monday through Thursday. The drawing beside this section splits the day into a quiet stretch, London, and the New York overlap. It's a rough sketch, not a schedule, so don't plan exits off it. Silver shares gold's delivery cutoff. Check SI's own spec for its hours before you assume they match GC.

London and the COMEX session are two pools of liquidity in one metal. The overlap is where both are awake. In the thin stretches a small order walks the price, and a tight stop becomes a donation. The drawing says that in one line. If the plan needs an exit during the thin hours or into the daily break, the plan is hoping for a fill. Flatten ahead of the break, or accept that a stop in an empty or closed market can fill far from the number in the notebook.

5. The delivery month

In the delivery month, GC stops trading on the third last business day of that month. Contracts still open are settled by delivering the gold on a business day of the delivery month. SI uses that same third-last-business-day cutoff. Most people in these tickers want the price. They don't want bars. They have to be out, or rolled into a later month, before the window. The date sits on the contract calendar.

Crude and natural gas keep a different exit and a different driver, barrels and storage, and the crude and natural gas lesson stays with those. Gold answers to the dollar and the real rate. Parking an energy exit rule on GC, or a gold stop on crude, is how a speculator meets a delivery desk he wasn't planning to visit.

6. Where metals trades go wrong

Borrowing a calm-index stop for gold, then sitting through a dollar move, is the expensive one. Right behind it's quoting 'one contract' as if GC and MGC were the same unit. They are $10 a tick and $1 a tick. A size copied from someone else's screen fails the same test as soon as $142 won't fund a $150 stop.

Those tick values come from the COMEX gold and silver rulebooks, and that's where to check them. Rate futures are a separate market. The Treasury rates lesson is where those contracts live. Mixing a gold view with a rate future still needs a dollar figure for what is left if the two stop traveling together.

Why I treat silver as the jumpier metal

The two metals often travel in the same direction, which tempts people to call them one market with two symbols. I don't. I treat silver as the jumpier of the two and size it that way, so a line copied from gold to silver gets smaller, not equal. Percent and dollars are different things, so do the dollar math for silver on its own instead of borrowing gold's.

Before the session, look at the dollar, at real yields if you follow them, and at the big U.S. number on that morning's calendar. Those can shove gold around in a few minutes, and I'd assume silver gets shoved harder.

What to check before a metals trade

• GC is 100 ounces and $10 a tick. MGC is 10 ounces and $1 a tick. SI's outright step is $25.
• At the diagram's $2,400 picture, one GC is $240,000 of gold.
• A $142 cap against a 15-tick GC stop of $150 is zero full contracts, or 9 MGC if 15 ticks still fits the day.
• Name the driver, dollar, real rate, or squeeze, and keep the Globex break and the delivery cutoff on the same note.

If the gold stop is 15 ticks only because a quiet index future would use 15 ticks, the metal is the wrong market for that ticket. Educational only. Not a recommendation to buy, sell, or hold any contract or pair.