Wednesday, September 29, 2010

E-micro Gold Contract to be Launched

They'll be plenty screaming this is the signal of a top:

The COMEX is launching an E-micro Gold futures contract.

It will offer incremental access to ownership of a 100-ounce bar of gold. The contract is based on ten ounces of gold, one-tenth the size of the world benchmark for gold prices, the COMEX Gold futures contract.

Other than its size, the E-micro Gold contract replicates the standard contract in most ways: same tick size, depository location, and last trading days.

One E-micro Gold contract, however, does not offer delivery of 10 ounces of gold. Ten contracts are required for that.

Each E-micro contract yields one Accumulated Certificate of Exchange (ACE), which provides ten percent ownership in a 100-ounce gold bar.

Ten ACEs can be converted into an official COMEX licensed gold warrant, representing an actual serial-numbered bar of gold.
This is far from a top in the gold market. The supply and demand fundamentals are simply too strong. That said, the best way to accumulate gold is via gold coins that you take delivery of.

This contract should only be used by traders who have risk money. Although gold should move much higher, there will be a correction to the current trend at some time that could wipe out a futures trader  who is operating on thin  margin.


  1. The CME and NYSE-LIFFE already have mini-gold contracts...

  2. Why gold coins? I would worry about theft or forgetting where I stashed them.

  3. You might find this interesting. From ESPN baseball analyst Rob Neyer on attendance at MLB games (emphasis mine),

    ""A third of one percent" is essentially "zero percent" ... which seems pretty good to me, considering the (justifiable) fear that people have about their jobs, their homes, their retirement accounts and just about everything else except their gold (I knew I should have bought some Krugerrands in the '80s). Going to the ballpark doesn't have to be expensive. You can take public transportation, sit in the cheap seats, and eschew the wildly overpriced food and beverages..."

    Link to the full post

    I take this as a sign the public is waking up to gold although the bridge between stat-head baseball fans and goldbugs probably isn't very large.