The gold market, in fact, is an institution that provides international settlements, used for investment and risk insurance, private hoarding and industrial and domestic consumption, as well as for various speculative operations. Its functioning is carried out due to the constant increase in the value of precious metals, since 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 carried out.
History: The first legal gold market appeared in London as far back as the 19th century, and until the 60s of the 20th century, the main city of Great Britain remained the center of world trade in precious metals. At this place, sales of this metal mined in various parts of the world were carried out, and 75% of sales were accounted for 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, special gold auctions have been most popular, where a significant proportion of transactions are carried out. Their opening allowed the IMF back in 1880 to sell off 18% of its stock of cash precious metal, and the United States leadership took the same steps in its time in order to maintain the position of the dollar.
Definition: Currently, the global gold market covers almost the entire circulation system of a popular precious metal on a large scale, including production, distribution and subsequent consumption. In a narrow plan, such a concept is often considered as a separate market mechanism that serves the sale and purchase of a given product at the international and national levels.
Features: Each modern gold market provides two varieties of transactions. The first form refers to the direct sale of precious metal bullion, and the second refers to wholesale trading methods in which the buyer acquires a “paper” certificate, where the right to own such items is recorded. As a kind of reserve and insurance fund, gold is used by almost all modern countries. To date, the IMF reserves and Central banks have concentrated 31, 000 tons of recorded state reserves of this precious metal. However, even more significant reserves are held by the population, and for the implementation of savings, many citizens use coins and jewelry.
Now the gold market is dozens of world centers where regular purchase and sale of precious metal is carried out. Such institutions are represented by associations of specialized firms, banks and other financial institutions, which also have the right to produce ingots. And the offer is formed by companies engaged in gold mining, and due to the regular increase in the cost of such products, manufacturers begin to process refractory and poor ores.
Consumers: Countries that are the main consumers of the precious metal are divided into two groups. The first of them includes technically developed states that use it in industrial sectors and all kinds of areas of technology, as well as in the manufacture of jewelry. These include Germany, the United States and Japan, in which gold acts as an indicator of the development of the latest technology in instrumentation. The second group includes Portugal and Italy, as well as countries in Asia and the East, where precious metals are used exclusively in the jewelry industry.
