Future gold is an asset classified as variable income , therefore it is subject to several market fluctuations. This fluctuation causes its price to vary according to the fundamentals that the market has been signaling. It may also change according to international expectations, given that its quotation is closely linked to the value of the dollar.
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In Brazil, the value of the gram is calculated in reais, with up to three decimal places. Thus, the minimum trading variation, as indicated on the B3 website, is R$ 0.001.
Let’s bring this concept into reality by demonstrating an example. Imagine that the price of gold at a certain time is R$ 220 per gram. If you operate in the standard market (OZ1D), a contract will move the amount of BRL 55 thousand (BRL 220 x 250, which is the standard lot).
However, we know that fractional lots exist, being 10 grams for the OZ2 code and 0.225 grams for the OZ3 code. So, keep in mind that the calculation is based on the weight represented by each contract, and on the quotation of each one – always remembering that the quotations, although similar, are different for each contract.
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How To Track The Gold Price?
Tracking the gold price is very easy. As previously mentioned, just access your trading platform, and in the quotations environment, search for the contract code of interest.
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How does the liquidation of gold take place?
Now, we will talk about liquidating gold. This process occurs physically and financially, depending on the contract.
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When dealing with futures and forward contracts , settlement takes place physically. With the contract that is most commonly negotiated, the spot (Available), settlement can be both physical and financial, the latter being the most common, as mentioned earlier.
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How Does The Liquidation Of Gold Take Place?
In the case of options on spot contracts, settlement on exercise takes place on the expiration date of the option, if the holder is interested, and up to the time limit pre-established by B3. If the holder does not exercise his right, the obligations imposed on the seller are terminated.
It is important to point out that, when dealing with contracts with financial settlement, such as spot, the sale can be carried out at any time – as long as the purchase has already been carried out, since, as we mentioned, there is no short sale of gold contracts. –, and the settlement, that is, the receipt of the amount in cash, occurs on the business day following the sale.
In the case of purchase, payment for acquiring the contract occurs in the same way: on T+1, that is, one business day after the negotiation.
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What Are The Advantages Of Investing In Gold Contracts?
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Initially, gold is a commodity that is recognized internationally, in addition to having liquidity at that level and being a durable store of value. Another point worth mentioning is the fact that gold appreciates, especially in periods of crisis.
As, in practice, you are dealing with contracts whose object is a highly liquid precious metal , it is common for many people, in times of crisis and fear, to acquire the asset to protect their equity from market fluctuations.
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In addition, as the price of gold is pegged to the dollar, it is possible to benefit both from the appreciation of the asset in the international market and from the devaluation of the exchange rate.
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In hard times when you are out of the money, you can sell the gold and get money.
- Investing in gold contracts is one of the safest ways to benefit from this commodity as a financial asset, since the gold ingots will be held in custody at an institution dedicated to this purpose, accredited by B3.
- Finally, gold contracts, especially the spot contract OZ1D, are sometimes accepted as collateral for other transactions. That is, in addition to diversifying your investments and protecting your portfolio, you can still use this contract as collateral for trading other assets, if this is accepted by your investment institution.
What Are The Disadvantages Of Investing In Gold?
Just like any other investment, all the variables related to it must be considered, even so that the investor can understand, in fact, whether or not that investment meets his expectations.
This asset, in times of falling demand and economic growth, may have its liquidity negatively affected, losing attractiveness. That is why investing in this asset may not be interesting for the short and medium term.
In addition, more accessible contracts generally have a lower trading volume – as is the case with the OZ3D contract – and, in many cases, it is necessary to have a higher available capital to access a more liquid contract.
Another disadvantage concerns the costs involved, which can be very high and vary, for example, according to the type of contract, and the period of permanence of it in your portfolio.
Finally, we can conclude that investing in gold is an excellent way to protect your portfolio or even for long-term gains. However, it is essential that you have a reliable investment institution that offers the best conditions for this and other types of investments.
