Gold and investment goes together.
First preference of people when it comes to investment is this precious yellow metal.
Gold dictates the investment strategy even in the interiors of India.
People love gold because of certain factors.
It has highest liquidityadvantage.
You can dispose it anytime you like.
Other main advantage is it is a safe investment because the price of gold never fluctuates wildly like shares.
Women love gold ornaments even more than they love their life partners.
People used to buy gold ornaments to make investment in the earlier days.
After a while it lost the investment value because of the making charge and depreciation etc.
People started to buy gold biscuits as an investment because of those factors.
Now this had a disadvantage of safety factor.
We cannot guarantee the safety of the yellow metal because of robbery.
This disadvantage is overcome by gold futures now.
Gold futures or bullion trade is part of commodity futures which works on the same principle.
You can enter in to a contract of specified days to buy or sell.
You can buy or sell for the future.
The actual transaction would take place at the prevailing rate when the contract is signed and the difference of buying and selling constitutes the profit of the transaction.
It also has an unique margin trading system where as you are not required to pay the whole amount upfront.
You pay only 5 to 10 percent of the value.
You can specify in the contract that you are not willing to take possession of the product.
You can notify that you would settle the difference if any in cash.
Learning gold futures is very easy with lot of sites offering the information for free.
This facility is available to Indians too.
People from India can participate via three commodity exchanges.