One use for futures markets is price discovery, that is, the futures price mirrors the current consensus

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One use for futures markets is “price discovery,” that is, the futures price mirrors the current consensus of the future price of the commodity. The current price of gold is $350 but you expect the price to rise to $400. If the futures price were $390, what would you do? If your expectation is fulfilled, what is your profit? If the futures price were $418, what would you do? What futures price will cause you to take no action? Why?

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