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How Are The Gold Prices Fixed?
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The gold market is highly dynamic and trading of gold is done on an international level and the rate of gold is also universal in nature. Internationally cost of gold, silver as well as other precious metals fluctuate but the maximum fluctuation is seen in gold as the gold markets have more customers with the metal being more in demand.
One of the main factors that determine the price of gold on a daily basis is the rate of the demand and supply. The rise and fall of one or the other can result in either the gold rate rising or falling.
Basically gold and silver are precious metals that have extremely difficult and expensive processes of mining. So the first reason is that mining the metals being an expensive process raises the cost of the metals. The increase in its cost is further raised by the cost of the recycling process of scrap that is got from the mining process. All these factors are taken into due consideration when deciding upon the rate of gold for a particular day.
The fixing of the gold price per gram is done by a panel of 5 members who belong to different groups of companies, but all of them related to gold markets, finance and trading. Every day the price of gold is fixed twice and the timings are at 10:30 am and at 3:00pm. Both the timings are based on GMT and the rates are fixed by the 5-member panel comprising of Banks like the Deutsche Bank, HSBC, banks under the investment banking sector like Barclays Capital and Societe Generale which is the division of the French multi-national company offering financial and banking services. A section of their organization deals in investment banking that is a part of the panel of five. The fifth in the panel is Scotia Mocatta, a division of Scotia Bank that deals with the global bullion banking and who an important member in the panel. All the five who decide on the rate are member of the London Bullion Market Association and hence have been given the power to set the today’s gold rate.
Known as a currency without any country as the trading of gold takes place worldwide and at a given point of time, gold trading is conducted at some place or the other in the world. The rate of gold is usually decided in US dollars, but in every market it undergoes a transition to the local currency according to the conversion rate of that currency.
Investing in gold is a great way to ensure that there is some support for the rainy day as gold always has high returns so investing in gold is safe. Convenient to invest with no documentation to show investing in gold is also is secured as its value does not diminish with geographical or political upheavals. Available to invest in different forms like an ounce biscuit, a coin or jewelry, gold has preserved its value and worth till today and so there seems to be no scope for a drastic fall in its rate therefore making investing in it a wise option.
Lesi Blend is an Author who wrote many article about today’s gold rate and gold trading and much more . He is a goldsmith, pearl and bead stringer and has also studied gemology.For more information Connect with her on Facebook or Twitter.
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