Gold Contract Definition. A Gold Contract is the standard unit of trading gold such that one contract is equal to 10 troy ounces. The “Troy” system of weight used for measuring precious metals, a holdover from the medieval period, is based on a pound of 12 ounces and an ounce of 20 pennyweights or 480 grains. Precious metals are measured in troy ounces worldwide. A Troy ounce equates to 1.097 ounce. Gold is traded 24/7 in many places and in many forms, ranging from futures contracts to the physically tangible rings, bars and coins. The price of Gold comes from a variety of market sources. Retail coin and bullion shops quote selling prices in terms of “spot plus X%” or “spot plus $Y.” The London Gold Fix, a pool of five large dealers, confer twice a day to set the price per a specific agreement or fixing such that trades can proceed at those fixings. The Comex is the busiest market for trading futures contracts in gold bullion. Each contract is for 100 ounces. Prices during the day represent actual trades taking place in a continuous, competitive auction. New York Spot Prices are quoted by dealers in New York every 30 seconds. These quotes reflect the bid and ask spreads used by wholesale dealers for spot delivery. Not surprisingly, during Comex trading hours, they track the Comex price for the spot contract.
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