It has been said all the time that investing in gold is one of the most stable methods in the market. One thing you have to be aware of is that investing in gold does not necessarily mean that you have to own the physical gold because like stock, they can be on the value of a specific volume. Investing in physical gold is possible through owning gold coins or gold bullions while you can also seek the non-physical way where you can invest in gold futures.
Investing in gold futures require an agreement between the buyer and the seller and this is pretty much the same concept as conventional futures or stocks where both the parties agree to trade a certain amount of gold at a current price in the near future. Typically, this is where both parties enter into a contract and then decide on how much gold are to be traded and this will also include information like the date of the delivery and the quality of the gold. The contract will not stipulate the price of the gold as it will refer to the current market price of gold.
Gold futures are commonly traded in international exchanges like the Shanghai Futures Exchange of China, the Chicago Mercantile Exchange of the United States as well as in the Multi Commodity Exchange of India where among the common advantages of gold futures is that you need not keep the stock. As mentioned, this is the same concept with that of any futures trading. This means that naturally, you do not keep any physical gold where all you have is a contract printed on a piece of paper. Without keeping the actual gold, it solves the problem of inventory where you need to hold the physical gold when investing.
Another good reason to invest in gold futures is that you are able to trade a large amount of gold without having to pay for the full value. Using only a fraction of the value, you will be able to enjoy the profits (and losses, if any) which is a common advantage over buying physical gold.