Understanding the precious in metals

摘要

The precious metals — gold, silver. platinum and palladium, although all have industrial uses — have publicly traded, standardized and liquid futures contracts. These contracts are used for both hedging and speculating. Futures contracts may be employed by mining producers and refiners to lock in (insure) selling prices. Fabricators may use contracts to protect inventory values, or insure metal supply prices. Speculators trade contracts to take advantage of price imbalances. All contracts specify metal weights in troy ounces. A troy ounce weighs 31.10 grams, roughly the weight of 11 U.S. pennies. "Market specs" (right) provides contract trading information, including the contract name, symbol, size, minimum contract price movement (tick), daily price movement limit, hours of trading and months traded. All these metals are primarily traded at the New York Mercantile Exchange, on Nymex's Comex division. (The Chicago Board of Trade lists mini contracts on gold and silver and announced on Aug. 11 it will start trading full-sized gold and silver contracts electronically starting Oct. 6.) Understanding the impact of news on a metal's price requires knowing some- thing of the metal's unique properties.