What is a future ? A spot contract is a purchase or sale for more-or-less immediate settlement.  In other words an investor agrees to trade something and immediately makes arrangements to pay for it and take delivery of what he has bought.  The actual settlement probably happens in 48 hours or so.  A futures contract is similar, in that an undertaking - or contract - has been agreed.  But there is a delay between the agreement to buy, and the date on which the agreed payment and delivery will take place.  In an Over The Counter [OTC] 'future' the two parties will agree on all the different aspects of that future settlement - i.e. purity of bullion, delivery location, delivery agents, method of funds transfer etc.  Because an OTC has lots of specifics unique to the parties one OTC future is quite unlikely to be easily exchanged with another one, so a customer who had bought would not be able to sell to anyone other than the counterparty who he bought the OTC future from.  This means OTC futures are not easily traded.  What happens in a futures exchange is that a set of terms which agrees the date, quality, delivery location and payment method required at settlement is agreed up front by all participants and is defined as a long term standard for a bullion contract.  These 'contracts' are then issued with dates for settlement which usually fall at the end of each quarter.  Then everyone can trade with everyone else, and the price efficiencies of an exchange can start to operate.