|Contract||E-Micro Gold 10-oz|
|Tick Size||0.1 per troy ounce ($1.00 per contract)|
|Daily Limit||10% above or below previous settlement|
|Contract Size||10 fine troy ounces|
|Months||Feb, Apr, Jun, Aug, Oct, Dec (G, J, M, Q, V, Z)|
|Trading Hours||5:00p.m. - 4:00p.m. (Sun-Fri) (Settles 12:30p.m.) CST|
|Value of One Futures Unit||$10|
|Value of One Options Unit||$10|
|Last Trading Day||Third last business day of the maturing delivery month|
Gold is a dense, bright yellow metallic element with a high luster. Gold is an inactive substance and is unaffected by air, heat, moisture, and most solvents. Gold has been coveted for centuries for its unique blend of rarity, beauty, and near indestructibility. The Egyptians mined gold before 2,000 BC. King Croesus of Lydia created the first known, pure gold coin in the sixth century BC.
Gold is found in nature in quartz veins and secondary alluvial deposits as a free metal. Gold is produced from mines on every continent apart from Antarctica, where mining is forbidden. Because gold is virtually indestructible, much of the gold that has ever been mined still exists in one form or another. The largest producer of gold in the U.S. by far is the state of Nevada, with Alaska and California running a distant second and third.
Gold is a vital industrial commodity. Pure gold is one of the most malleable and ductile of all the metals. It is a good conductor of heat and electricity. The prime industrial use of gold is in electronics. Another important sector is dental gold, where it has been used for almost 3,000 years. Other applications for gold include decorative gold leaf, reflective glass, and jewelry.
In 1792, the United States first assigned a formal monetary role for gold when Congress put the nation's currency on a bimetallic standard, backing it with gold and silver. Under the gold standard, the U.S. government was willing to exchange its paper currency for a set amount of gold, meaning its currency was backed by gold. However, President Nixon in 1971 severed the convertibility between the U.S. dollar and gold, which led to the breakdown of the Bretton Woods international payments system. Since then, the prices of gold and paper currencies have floated freely. U.S. and other central banks now hold physical gold reserves primarily as a store of wealth.
Gold futures and options are traded at the CME Group. Gold futures are traded at the Bolsa de Mercadorias and Futuros (BM&F), the Tokyo Commodity Exchange (TOCOM), the Chicago Board of Trade (CBOT), and the Korea Futures Exchange (KOFEX). The Nymex gold futures contract calls for the delivery of 100 troy ounces of gold (0.995 fineness), and the contract trades in terms of dollars and cents per troy ounce.
Prices - CME gold futures prices (Barchart.com symbol GC) raced higher in Q1 of 2022 and posted an all-time nearest-futures high of $2,072 per ounce in March. Russia's invasion of Ukraine stoked safe-haven demand for gold, and a surge in global inflation to a four-decade high boosted demand for gold as a hedge against inflation. Gold prices then ratcheted lower into Q3 and fell to a 2-1/2 year low of $1,613 per ounce in September. Gold prices sank as the aggressive interest rate-hike campaign by the Federal Reserve to combat inflation boosted T-note yields and sent the dollar soaring. The dollar index surged to a 20-year high in September, which sparked an exodus of investors from gold as holdings in gold ETFs fell to a 2-1/2 year low. Gold prices then stabilized and rose into year-end as an easing of U.S. inflation pressures prompted the Fed to slow the pace of its aggressive rate-hike regime. The Fed raised the fed funds target range by only 50 bp at the December FOMC meeting, a slower pace than the 75 bp rate hikes seen at the previous four FOMC meetings. Gold prices finished 2022 little changed, down -0.4% yr/yr at $1,819.70 per troy ounce.
Supply - World mine production of gold in 2022 rose by +0.3% yr/yr to 3.100 million kilograms, down from the 2018 record high of 3.310 million kilograms (1 kilogram equals 32.1507 troy ounces). The world's largest producers of gold in 2022 were China with 10.6% of world production, followed by Australia and Russia with 10.3%, Canada with 7.1%, the U.S with 5.5%, South Africa with 3.5%, and Peru as well as Uzbekistan with 3.2%.
U.S. gold mine production in 2022 fell by -9.1% yr/yr to 170,000 kilograms. Canada's gold mine production in 2022 fell by -1.3% yr/yr at 220,000 kilograms, down from the 2021 record high of 223,000 kilograms.
U.S. refinery production of gold from domestic and foreign ore sources in 2022 fell by -5.9% yr/yr to 160,000 kilograms. In addition, U.S. refinery production of gold from secondary scrap sources in 2022 fell by -2.2% yr/yr to 90,000 kilograms.
Demand - U.S. consumption of gold in 2022 fell by -6.0% yr/yr to 250,000 kilograms. U.S. usage of gold is mostly for jewelry.
Trade - U.S. exports of gold (excluding coinage) in 2022 rose by +11.4% yr/yr to 430,000 kilograms, well below the 2012 record high of 699,000 kilograms. U.S. imports of gold for consumption in 2022 fell by -27.1% yr/yr to 140,000 kilograms.
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