InvestorQ : Can I also hold gold in the form of gold futures that the MCX keeps advertising about all the time?
Priyanka N made post

Can I also hold gold in the form of gold futures that the MCX keeps advertising about all the time?

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NISHA Nayak answered.
2 years ago
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If you have a trading account in which the commodity trading account is also activated then you can buy gold futures in your commodity account. Remember, that gold futures are slightly different because they are just contracts and hence can be speculative in nature. Your gold future is just a gold contract that has gold as its underlying. You can buy for physical delivery or for speculation. However, gold futures are not an asset class but just a derivative contract. You must remember that before taking positions in gold futures.

MCX is the exchange that sees the largest volumes on gold futures. Futures, as we all know, are leveraged products. You essentially play a small margin and then take a position betting on the direction of the commodity price. While here also you benefit from gold price movement, there are two risks. Firstly, gold futures are leveraged positions. That means just as returns will be magnified, losses will also be magnified. Secondly, gold futures being leveraged products will call for additional margins, MTM margins etc. All these can make your life quite complicated if you are looking to invest in non-physical gold and forget about it!

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