International Gold Exchange
The international gold exchange is a physical market where gold bullion is traded in large volumes. It is a global network of financial institutions, banks, and bullion dealers that facilitate the exchange of physical gold. The primary purpose of the international gold exchange is to provide a platform for investors to trade gold and to ensure liquidity in the gold market.
History
The international gold exchange has its roots in the gold standard, which was a monetary system in which the value of a country’s currency was fixed to a certain amount of gold. The gold standard was abandoned by most countries in the early 20th century, but the international gold exchange emerged as a way to continue trading gold in a centralized market.
Structure
The international gold exchange is a decentralized market with no central authority. It is composed of a network of bullion banks, gold dealers, and other financial institutions that operate in different parts of the world. The largest bullion banks are located in London, New York, and Zurich.
Trading
Gold is traded on the international gold exchange in the form of bullion bars and coins. The most common bullion bars are Good Delivery bars, which are 400 troy ounces in weight and meet certain purity standards. Gold coins, such as the American Gold Eagle and the South African Krugerrand, are also traded on the international gold exchange.
Pricing
The price of gold on the international gold exchange is determined by supply and demand. The spot price of gold is the current price at which gold can be bought or sold for immediate delivery. The spot price is quoted in US dollars per troy ounce.
Settlement
Gold trades on the international gold exchange are settled through the London Bullion Market Association (LBMA). The LBMA is an association of banks and bullion dealers that provides clearing and settlement services for the gold market.
Importance
The international gold exchange is an important part of the global financial system. It provides a liquid market for gold, which is a safe-haven asset that investors often turn to in times of economic uncertainty. The international gold exchange also plays a role in the pricing of gold, as the spot price of gold is often used as a benchmark for the price of gold in other markets.
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