What Is The COMEX?
Whether you are considering a Precious Metals purchase or you have already begun investing, you have undoubtedly heard of the COMEX. Understand how COMEX operates and learn why it is the primary market for trading Gold, Silver and other Precious Metals.
A Brief History of COMEX
Once known as Commodity Exchange Inc., COMEX dates back to 1933 when the New York Hide Exchange, the Rubber Exchange of New York, the National Metal Exchange and the National Raw Silk Exchange merged. Six decades later, COMEX merged with the New York Mercantile Exchange (NYMEX) and began to serve as the metals trading division for the exchange. In 2006, NYMEX was first listed on the New York Stock Exchange as NMX.
In 2008, the CME Group purchased the exchange. Now both NYMEX and COMEX function as designated contract markets alongside the Chicago Mercantile Exchange and the Chicago Board of Trade, which the CME Group also owns.
How COMEX Operates Today
As a thoroughly established market, COMEX serves as the primary exchange for trading Aluminum, Copper, Gold, Platinum, Palladium, Silver and Steel. Contracts may be standard in size, or micro versions may be traded.
COMEX boasts an international client base and has adjusted its operating hours accordingly. An earlier opening time better accommodates traders in the Eastern Hemisphere and has allowed the exchange to grow and gain value. Today, COMEX has more liquidity than any other metals exchange.
What You Can Purchase Through COMEX
Rather than selling actual base metals or Precious Metals, COMEX deals in Gold futures, Silver futures and similar products. Some investors may opt to take physical delivery of their Gold purchases, but not all do. Instead, most either close out or continue the contracts they purchase through COMEX, using them as a venue for decreasing financial risk.
Those who do take delivery on a futures contract must complete a notification process in advance. They must initiate the process before the last trading day pertaining to the contract, and they must make both the clearing firm and the market itself aware of the impending transaction. These investors may take delivery only once they have obtained relevant receipts.
COMEX Gold purchases are closely monitored to protect both the investor and the market. All metals must meet specific fineness requirements and must be accompanied by an assay certificate. Once delivered, investors may move COMEX Copper and other Precious Metals without additional assessment. This holds true as long as the metals do not undergo refinement or deposit by unapproved organizations or facilities.
How COMEX Affects the Value of Precious Metals
Ultimately, an exchange like the COMEX does not directly affect the price of Gold quotes or Silver quotes. Instead, the world market, which includes both buyers and sellers, establishes and adjusts the price of Gold futures and Silver futures. COMEX exists primarily as a place to manage financial risk.
For decades, COMEX has provided savvy investors with lucrative opportunities. From Gold quotes to Silver futures, COMEX allows buyers and sellers to exchange base metals and Precious Metals without taking on undue financial risk.