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A Guide to How the Gold Business Operates

Gold has always been the foundation of wealth, mainly due to its rarity and malleability, and with currencies wildly fluctuating, many investors are turning to gold. Gold is mined, refined and smelted into bullion bars and ingots, which are then released into the global marketplace, and with the spot price of gold at any given time, gold can be bought or sold in an instant.

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Gold Producing Countries

The main producers of gold are, South Africa, China, USA, Russia and Canada, while Australia, Peru and Indonesia also mine for gold. When gold is mined at source, it is produced in dore bars, which are roughly 80% pure, then it is sent to a gold refinery, where it can be turned into a number of purity levels. London Good Delivery bars are widely accepted across the world, which are made according to standards laid down by the London Bullion Market Association (LBMA), with each bar weighing between 380 and 430 ounces (most weigh in at 400 ounces). Purity is a minimum of 99.5%, with each bar having a unique stamp identification number, along with the seal of the refinery and the fineness.

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Bullion Dealers

These are the middlemen of the industry, who buy directly from a central bank and then sell to anyone who wishes to buy. When looking to buy gold Brisbane investors use an established local gold bullion dealer who offers top prices and has a solid reputation within the industry. The bullion dealer can facilitate spot trading or futures, which attracts many veteran investors. Should you think that the price of gold will rise soon, due to currency fluctuations, for example, then you can purchase gold on paper, without actually receiving the precious metal. Futures is not for the inexperienced and fortunes can be won or lost in a very short period of time.

 

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Gold Jewellery

A fair portion of gold ends up being jewellery, although this sector is not recommended for investing, and old jewellery is smelted down and returns to the market in the form of an ingot, or another item of jewellery.

 

How Is The Spot Price Calculated?

Gold prices are determined by supply and demand, with the main gold market located in London, while others operate from New York and Dubai, and when a bullion dealer wishes to buy, they would purchase from one of the big 3 markets. There are several gold price fixing times in a day, and this transparent benchmark is used by all the major gold dealers, and when compared with other forms of investment, gold has a record of performing well.

 

If you would like to diversify your investment portfolio and are looking at gold, you are advised to do a little online research, before making contact with a local gold bullion dealer, who can easily be located with an online search. Like anything, you should begin by purchasing a small amount, say a few ounces, and define your goals, which will help you with your investment strategy. Read up on what the experts are saying about gold as an investment, and by reading regularly, your knowledge will increase and you can take a further step in your gold investing.

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