How the gold futures market works

Gold bar

If you’re considering a way to buy gold online, you might want to look into the gold futures market and how it works.

In this post, we’re going to cover just that.

Defining Gold Futures

Put simply, buying into a gold future means locking in a time to buy the asset in the future. It’s about predicting the price of gold. For example, if gold is at a high price today, you can expect it to potentially drop in three months’ time. You would invest in a futures contract that commits you to buy a certain amount of gold on that day.

Of course, while you can profit significantly from buying and selling futures, you can also see a significant loss. In the case your prediction didn’t go as planned, you can close the trade early or even push it to another date. This ensures users aren’t entirely at a loss if the prediction is off.

Why Invest in Gold Futures?

Now, if you’re new to futures, you might be wondering, “why not just buy gold at its current price?” Well, doing so costs many fees, you’ll have to pay taxes on it, and you’ll have to store it. Futures circumvent a lot of this.

For one, you don’t hold the gold in a futures contract until it ends. There’s no need to pay for storage during that time. That also circumvents any other purchasing fees, and you can even pay taxes on long or short-term gains – a potentially cheaper way to buy gold.

Overall it’s a higher risk than buying traditional bullion, but with a higher reward if done right. You can both short or long positions, after all. If you have been paying attention to market trends, gold futures might just be for you.

How Much Should I Invest in Gold Futures?

While futures do save you a lot of time and money in various ways, you can’t just buy a small amount.

Futures contracts can require a minimum investment of thousands, considering you need to buy in ounces. You can only hold so many contracts at that, due to exchange limits.

Assuming you have the funds to start, futures can certainly be a big way to profit. If you don’t have much, however, you might want to look into other avenues.

Where Can I Invest in Gold Futures?

There are various exchanges in which you can invest in gold futures. Let’s go over a few.

Charles Schwab

If you’re new to the market, Charles Schwab is a great place to start. This group features trading insights and investment advice for beginners. These learning spaces are a fantastic way to dip your toes in the futures space.

From there, the platform also offers stock reports from various stock exchanges – great once you become a little more advanced. There’s also a $0 account minimum at that, so new traders don’t have to risk much. Just know that this platform does charge higher trading fees than others.


Once you’ve gained some knowledge about futures, or if you already have some, NinjaTrader is the way to go.

This platform offers trading charts, provides you with market analysis, and even allows you to simulate trades for the experience. Before committing, NinjaTrader even offers a 2-week free trial to try it out.

However, know that NinjaTrader has a $400 minimum balance rate. That said, if you buy their lifetime license, you can lower commission fees if you’re a long-time trader.

Overall, the futures market is ideal for investors with the funds and knowledge to invest. If you’re new to the space, don’t let that deter you, either. Everyone was new at one point.