What is the world gold market?

The gold market, in fact, is an institution that ensures the performance of international settlements, used for investment and insurance of risks, private use of goods and industrial and domestic consumption, as well as for various speculative operations. Its functioning is carried out due to the constant growth of the value of precious metals, as they are an excellent alternative to various unstable currencies. Therefore, the quotation of gold can be considered as a criterion on the basis of which the assessment of macroeconomic activity of various states is performed.

History : The first legal gold market appeared in London as far back as the 19th century, and up to the 60s of the 20th century the main city of Great Britain remained the center of the world trade in precious metals. At this point, sales of this metal produced in various parts of the world were sold, and 75% of sales fell on products imported from South Africa. Subsequently, most of these transactions were carried out in Zurich, and the British capital was pushed into the background. Since the end of the last century, the most popular special gold auctions, where a significant proportion of transactions are carried out. Their discovery allowed the IMF in 1880 to sell 18% of its stock of cash precious metal, and the same steps were taken by the US leadership in order to maintain the dollar's position.

Definition : At present, the world gold market covers almost the entire circulation system of popular precious metal on a large scale, including production, distribution and subsequent consumption. In the narrow sense, this concept is often considered as a separate market mechanism that serves the purchase and sale of this product at the international and national level.

Features : Each modern gold market provides for two types of transactions. The first form relates to the direct sale of precious metal in ingots, and to the second - wholesale methods of trade, in which the buyer acquires a "paper" certificate, where the right to own such items is fixed. As a kind of reserve and insurance fund, gold is used by almost all modern countries. To date, the reserves of the IMF and the Central Banks are 31000 tons of registered state reserves of this precious metal. However, even more significant stocks are kept by the population, and many citizens use coins and jewelry to carry out their savings.

Now the gold market is dozens of world centers where regular buying and selling of precious metal is carried out. Such institutions are represented by associations of specialized firms, banks and other financial structures that also have the right to manufacture ingots. A proposal is formed by companies engaged in gold mining, and due to the regular growth in the cost of such products, producers begin to process refractory and poor ore.

Consumers : Countries that are the main consumers of precious metal are divided into two groups. The first of these includes technically advanced states that use it in industrial sectors and all kinds of technical fields, as well as in the production of jewelry. These include Germany, the United States and Japan, in which gold acts as an indicator of the development of new technologies in instrument-making. The second group can include Portugal and Italy, as well as countries in Asia and the East, where precious metals are used exclusively in the jewelry industry.