In case of any futures contract defined on any underlying, the price of the underlying usually decides the price of its futures.
In case of Commodity futures, the price of the underlying Commodity will be the major factor in determining the Commodity futures prices. Other than that, the interest rate, risk premium, time to expiry and cost of carry are other factors which may have an influence on price of Commodity futures. The simple difference between a forward and a future contract is that forward contract is NOT through an exchange while future usually is on an exchange.
Usually, spot prices from any spot exchanges are used as underlying benchmark for commodity futures. OR, he may have purchased Gold long time back at cheap price (say $50), but instead of selling them at market price of $110, he is forced to sell it to Bunny at $101 (the agreed futures price). Margin requirements on futures means both the parties assessing their positions at the end of each day and the loosing party providing margin money via the exchange to the winning party.
These futures can be exchange traded futures like those on Chicago Board of Trade (CME Group) CBOT, Chicago Mercantile Exchange CME or New York Mercantile Exchange NYMEX or can be OTC (Over the counter) between two parties on mutually agreed terms. Like any other futures contract, Commodity futures have an expiry date and the futures price. If at that end of the day, Bunny is in profit and Sunny is in loss, then Sunny needs to provide margin money to Bunny (via the exchange) to remain in the futures position).
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