What determines the spot price of gold?
Gold spot price is determined by the process of discovering supply and demand. The Golden Market participants include buyers and sellers. The offer and request for prices are discovered within the cash market (OTC) and on the commodity futures market. The golden price of gold is then published on gold exchanges.
The gold market segment represents almost all the physical exchange of gold. Benchmark Spot Price gold is London Fix. This is the most widespread indicator of gold spot price on the cash market of OTC. London repair occurs twice a day. Repair AM Fix and PM repair include gold retailers from the five largest Bullions of London. Participants are determined by the number of buyers and sellers they have at this price. If there are more buyers than sellers, the chairman will adjust the spot price up. The IS spot price adjusted if there are multiple retailers. This process continues until balance is achieved, and this will become a new spot price of gold.
segment of commodity futures on the Gold market is the way almost all retailers with retail gold participate in the market. Futures gold is determined by supply and demand in the Futures contrast. Gold Futures at spot prices is constantly changing due to the pure effect of buyers and sellers opening and final positions. These fluctuations of constant prices relate to the futures market more than the OTC market.
Gold spot price is influenced by many factors. Large gold traders such as central banks and gold mining companies are putting pressure up and down to score gold prices. Gold merchants of this size are able to adjust gold prices up or down to their benefit.
Delivery of demand dynamics affects the rate of gold. Supplier flows include the production of mining, central bank sales and recycled gold. Demand flows include industrial, investment, central bank purchases and jewelry.Gold supply and demand for gold are widely dispersed around the world.
Purchase of gold at a hinting price may not be possible for a retail investor. The receipt of delivery in the futures market is very rare. A huge lever effect is used on the futures market. Taking the delivery of one gold futures contracts would require the investor to accept the delivery of 100 Trojan ounces of gold - equivalent of £ 6.9 (3.1 kg) - which is the standard size of one futures contract.
Gold spot price is primarily used to invest and speculate in commodity futures contracts. These contracts can be concluded at any time before expiry, resulting in profit or loss. If delivery is received, it is usually in the form of a certificate of ownership. Physical sections usually remain in a safe safe.