What Is COMEX? Gold and Metals Futures Exchange Explained

Search Fintrev

Search our guides, reviews and glossary.

COMEX (Commodity Exchange, Inc.) is the main U.S. futures and options exchange for metals, best known for gold, silver and copper futures. It operates as a division of CME Group. Its role is to give hedgers and speculators a standardized, centrally cleared market for metal prices. Most COMEX contracts are closed out before expiration, and fewer than 1% end in actual delivery of metal.

What COMEX Is

COMEX is an exchange, not a dealer. It lists standardized contracts, sets the rules for trading and delivery, and publishes official settlement prices. Trades are cleared through CME Group’s clearinghouse, which stands between buyer and seller so that neither side depends directly on the other’s creditworthiness.

The exchange has historically been based at the World Financial Center in Lower Manhattan. Today, trading in its contracts happens almost entirely electronically on CME Globex, CME Group’s trading platform. As a U.S. futures exchange, it is overseen by the Commodity Futures Trading Commission (CFTC).

Because so many participants trade metals there, COMEX prices act as a global reference point, a process called price discovery. Miners, refiners, jewelers, manufacturers, banks, funds and individual speculators all trade on the same order book. COMEX does not set those prices. They come from supply and demand, and the exchange only calculates the official daily settlement price from trading activity under its own rules.

A Short History

The Commodity Exchange was created in New York in 1933 through the merger of four smaller exchanges:

• the National Metal Exchange
• the Rubber Exchange of New York
• the National Raw Silk Exchange
• the New York Hide Exchange

Over time, metals became its core business. In 1994 it combined with NYMEX, the energy futures exchange, forming the largest physical futures exchange in the world, with COMEX kept as the metals division. In 2008, CME Group acquired NYMEX Holdings, bringing NYMEX and COMEX under the same parent as the Chicago Mercantile Exchange and the Chicago Board of Trade.

How COMEX Trading Works

A futures contract is an agreement to buy or sell a fixed quantity of an asset at a set price on a future date. Every COMEX contract in a given product has the same quantity, quality standard, delivery months and delivery procedure, so anyone can trade with anyone else through the clearinghouse.

A buyer (long) gains if the price rises. A seller (short) gains if it falls. Either side can exit before expiration with an offsetting trade, and almost all participants do. A gold miner might sell futures to lock in a price for future output, a jewelry manufacturer might buy futures to fix the cost of metal it needs later, and a speculator simply takes a position to profit from a price move.

Main COMEX Contracts

Gold, silver and copper futures trade in standard sizes, and some also trade in mini and micro sizes that let smaller accounts take positions. The best-known contracts and their ticker symbols are:

• Gold futures (GC): 100 troy ounces per contract
• Micro gold futures (MGC): 10 troy ounces per contract
• Silver futures (SI): 5,000 troy ounces per contract
• Copper futures (HG): 25,000 pounds per contract

The wider metals lineup also includes aluminum, palladium, platinum and steel contracts, along with options on many of the futures. Precious metals are quoted per troy ounce. Each contract month adds a letter code and year to the root symbol, so a quote for “GC” refers to a specific delivery month, not to gold in general.

How Physical Delivery Works

Delivery is possible, even though it is rare. The process runs on a defined schedule:

1. Delivery period. Delivery can take place from the contract’s first notice day through the last delivery day of the contract month.
2. Long side. A buyer who wants metal keeps a long position open into the delivery period, informs the clearing firm and the exchange of the intent to take delivery, and waits for a seller to issue a delivery notice.
3. Short side. A seller who cannot deliver must close the position by the last trading day. A seller who does deliver must hold the metal in a COMEX-approved depository. Ownership is represented by COMEX-approved electronic warrants or warehouse receipts, which are required to make or take delivery.
4. Transfer. The warrant passes to the buyer two business days after the seller gives notice of intent to deliver. The price is the exchange settlement price set on the day the seller’s notice is given.

The buyer receives COMEX-deliverable (“good delivery”) bars. These are produced by COMEX-approved refiners and must meet exchange standards for minimum purity, weight and size. The exchange itself never supplies metal. It only defines what qualifies and how ownership changes hands.

Registered and Eligible Inventories

COMEX publishes warehouse stock reports for its metals, and they split inventory into two categories.

• Registered metal has a warrant issued against it and is available for delivery against futures contracts.
• Eligible metal meets exchange standards and sits in an approved depository but has no warrant. It belongs to its owner and is not committed to the delivery process.

Eligible metal can become registered if its owner obtains a warrant, and registered metal can move back to eligible. When reading reports on COMEX gold, silver or copper stocks, the registered figure is the one tied directly to delivery. A total that combines both categories says only how much metal sits in approved vaults.

Leverage and Margin

Futures are bought and sold on margin. Instead of paying the full value of the metal, a trader posts an initial margin deposit set by the exchange and broker. Positions are then marked to market daily at the settlement price. Gains are credited and losses are debited from the account each day. If the balance falls below the maintenance margin level, the broker issues a margin call for more funds or may close the position.

Hypothetical example (for illustration only): assume gold futures trade at $2,000 per ounce and the margin required for one 100-ounce contract is $10,000.

• Contract value: 100 × $2,000 = $200,000
• A 1% price move: $2,000 gain or loss, which is 20% of the margin posted
• A 5% adverse move: $10,000 loss, the entire margin deposit

The same math applies to gains. Actual margin requirements are set by the exchange and broker and change over time. Because losses can exceed the initial deposit, futures traders often estimate potential losses before entering a position, for example with value at risk.

Event Contracts

COMEX also lists event contracts on some metals futures. Each has a strike price and, at expiration, pays a fixed settlement value depending on whether the underlying futures contract’s daily settlement price ends above or below that strike, rather than giving open-ended exposure to every dollar of movement.

Strike prices are listed at set intervals. Trading ends at the close of the underlying futures’ daily settlement period on the expiration date. Chapter 23 of the COMEX rulebook covers these contracts, including trading halts, market disruption events, special price fluctuation limits and what happens if a reliable settlement price is not available.

Reading COMEX Market Data

• Last price and settlement price. The last price is the most recent trade. The settlement price is the official end-of-day value used for marking positions to market.
• Volume. The number of contracts traded in a session, as reported by the exchange. This differs from the tick volume on many spot forex charts, which counts price changes, not traded quantity.
• Open interest. The number of contracts still open at the end of the day. High volume can leave open interest unchanged if traders are mostly closing positions against each other.
• Contract month. Each month trades as a separate contract with its own price. A general quote usually shows the front, or most active, month.

COMEX and Other Gold Markets

COMEX is one of the largest venues for gold trading. The other major centers are the London over-the-counter (OTC) market and the Shanghai Futures Exchange and Shanghai Gold Exchange. Dubai, India, Japan, Singapore and Hong Kong are also significant markets but much smaller.

London’s OTC market trades physical gold bilaterally, while COMEX trades standardized, centrally cleared futures. The gold offered on forex platforms, usually quoted as XAU/USD, is typically an OTC spot or CFD price from the dealer or broker, not a COMEX contract, and it carries the broker’s terms rather than exchange rules. Prices across these venues track each other closely because traders arbitrage differences, but the instruments, costs and counterparty arrangements differ.

Can Individual Investors Trade COMEX?

Yes. Individuals trade COMEX contracts through brokerage accounts approved for futures trading. Brokers generally require a separate futures approval, and the account must hold enough cash to meet margin requirements and absorb daily mark-to-market losses. Micro contracts such as micro gold were designed partly for smaller accounts, since one contract represents a fraction of the standard size.

Futures also differ from owning metal or holding a metals fund. Positions expire and must be closed or rolled into a later month. Daily settlement can force a trader to add cash during a drawdown. Holding a long position into the delivery period can trigger delivery obligations the trader did not intend. For long-term exposure without those mechanics, investors often compare futures with physical bullion and exchange-traded products.

FAQs

The Bottom Line

COMEX matters to anyone who hedges metal costs, speculates on gold, silver or copper, or follows metals prices, since its settlement prices serve as a global reference. Individuals can trade its contracts through a futures-approved brokerage account, but margin, daily mark-to-market losses, expiration and possible delivery obligations make futures different from owning bullion or a metals fund.