Futures Trading of Gold

New York
New York (Comex) vs London (LME) vs Tokyo (Tocom)

London

The difference in demand and supply of a precious metal in one geographical market (location) compared to that in another market could lead to a difference in price. For example, say the price of gold in New York is $1250 per ounce and in London it is GBP 802 per ounce. Assume exchange rate of 1 USD = 0.65 GBP which makes the dollar equivalent London gold price $1235.5. Assume the cost of shipping from London to New York is $10. A trader can expect to benefit by purchasing gold in the lower cost market (London) and selling it in the higher priced market (New York). Total buy price (cost plus shipping) will be $1245.5 and trader can expect to sell it for $1250, for a profit of $4.5.

Monitoring the price fluctuation between the 3 markets, we will always be assured of profiting the highest margin in the market on a daily basis.


Tokyo