Gold investment has experienced four stages: physical gold, paper gold, futures gold and spot gold, and also represents four ways or types of gold investment. Among them, the short-selling mechanism is futures gold and spot gold.
Futures gold is formulated in a unified way, which stipulates a standardized contract to deliver a certain amount and quality of gold at a specific time and place in the future. Its only variable is the price, which is generated by the open bidding of the futures exchange. Gold futures can play its "capital leverage" function, reduce capital investment for investors and improve the return on investment.
In addition, gold futures can be long or short, giving investors the opportunity to choose in both directions. When the market is bullish and bearish, it can bring returns to investors. However, due to the limitation of delivery period, gold futures not only face the increasing margin ratio, but also face the choice of whether to close the position in advance. If they don't choose to close their positions, they must deliver the physical gold at maturity.