The precious metal market is extremely active in the international arena. Gold and silver are traded internationally 24 hours a day and the prices constantly fluctuate depending on the activity in the international marketplace. When the stakeholders in the market buy and sell gold and silver, the price of those metals either goes up or down based on the supply and demand factors.
The supply of gold and silver comes from recycled scrap metal and mining activity. Mining for metals is not an easy process and is very expensive. Mining companies usually operate in remote places in the world and the cost to operate the mine is very expensive. Due to limited access of mining materials and cost of capital to operate a mine, competition is scarce. Recycling on the other hand is an activity anyone can get involved with. It's as easy as determining what jewelry or household items you have that are made of precious metals, and selling them for a profit. The recycling of precious metals is a billion dollar industry. Anyone looking to sell their precious metals should locate a reputable buyer that will pay a fair price for their gold and silver.
The demand for precious metals is based on the demand for jewelry, investment demand, and the industrial demand. Gold has been treasured for thousands of years. Some people look at purchasing jewelry as an investment that they can wear. Individual and institutional investors are purchasing small bullion coins or bars. Some investors are investing in Exchange Traded Funds. In the industrial world, precious metals are used in multiple applications primarily due to their unique properties of being able to conduct electricity, being durable, and corrosion resistant. Gold and silver can be found in electronics that are in your home.
The gold price is fixed twice a day starting at 10:30 AM and again at 3:00 PM London time. The gold price is fixed by 5 members of the London Gold Market Fixing. The 5 members are members of the London Bullion Market Association. The members are Scotia- Mocatta, Barclay's Capital, Deutsche Bank, HSBC, and Societe Generale.
In the late 17th century, the city of London emerged as the center for precious metals trading. In 1696, the Bank of England established the worlds first Gold Standard which shifted the balance of coins from silver to gold. By the late 1800's, a number of countries adopted the gold standard which caused London to lose some of its authority. In 1919, the London Fixing was established.
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