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Forward selling remains a threat to other gold mining companies because the amount sold short via forward sales is disproportionate to the size of the gold market. Some estimates have total forward sales equivalent to three to five years of production. One or two small short positions could be unwound with only minor price increases. But, the total position is enormous, and reversing it without the price of gold skyrocketing will be difficult, if not impossible. Forward selling involves borrowing gold and selling it, and it is done mostly by mining companies because, logically, they should be able to replace the borrowed gold out of future production. Forward selling is profitable because the lenders, primarily central banks, lend with charges lease rates of about 1%, sometimes even less.
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Apart from that, being able to hedge against foreign currency risk is definitely the main benefit of forex futures trading for companies and institutions.
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If the contract size says 100 then 1 pip is $1, if it says 10 then $0.
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forex investment