World Gold Market Introduction

World Gold Market Introduction

1. Introduction of International Gold Market

(1) London Gold Market

The London gold market has a long history and its history can be traced back more than 300 years. In 1804, London replaced Amsterdam, the Netherlands, as the world's gold trading center. In 1919, the London gold market was officially established, and two gold prices were set in the morning and afternoon each day. The five gold companies set the gold market price for the day, which has been affecting transactions in New York and Hong Kong. The supplier of market gold is mainly South Africa. Before 1982, the London gold market was mainly engaged in gold spot trading. In April 1982, the London futures gold market opened. At present, London is still the largest gold city in the world

One of the characteristics of the London gold market is that the trading system is rather special because London does not have an actual trading venue and its transactions are done through intangible ways - the sales networks of major gold companies. The trading members are composed of the five most authoritative gold merchants and some companies or shops that are generally recognized as qualified to purchase gold from five major gold merchants. They are then composed of various processing manufacturers, small and medium-sized shops, and companies. During the transaction, gold dealers will report the purchase price and the selling price according to their respective buying and selling.

Another feature of London gold market trading is its flexibility. The purity, weight, etc. of gold can be chosen if the customer requires delivery in a remote area. Gold merchants will also report freight and premiums, etc., and may also quote futures prices as requested by customers. The most popular method of trading London gold is that customers can purchase gold spot without cash settlement, and only need to pay interest at the agreed interest rate when due, but at this time, the customer cannot obtain physical gold. This gold trading method involves digital games on the account books until the customer performs the opposite operation to close the position.

The special trading system of the London gold market also has several deficiencies. First of all, since the price of each gold business newspaper is a real price, sometimes the gold price in the market is turbulent. Even gold dealers do not know which gold price is reasonable. They have to stop the quotation and the trading of London gold will stop. The second is Clients in the London market are absolutely confidential and therefore lack statistics on effective gold trading positions.

(2) Zurich Gold Market

The Zurich Gold Market is an international gold city developed after the Second World War. It is a peninsula of the peninsula of the peninsula. It provides a free and confidential environment for gold trading. There are also preferential agreements between Switzerland and South Africa, 80% of South African gold, as well as the former Soviet Union's gold is also gathered here, making Switzerland not only the world's largest new gold transfer station, but also the world's largest private gold storage center. The Zurich gold market ranks second only to London in the international gold market.

The Zurich gold market has no formal organizational structure. The three major banks in Switzerland: Swiss Bank, Credit Suisse and UBS are responsible for clearing and settlement. The three major banks can not only conduct trades for customers, but gold trading is also the main business of these three banks. Zurich Gold Pool is established on the basis of informal consultations with the three major Swiss banks and is not subject to government jurisdiction. As a combination of traders, the pool of clearing systems plays an intermediary role in the market.

The Zurich gold market has no gold price fixing system. At any given time on each trading day, the trading gold price for the day is negotiated according to the supply and demand conditions. This price is the Zurich gold official price. The fluctuation of the whole day's gold price on this basis is not limited by the price limit.

(3) U.S. Gold Market

The gold market in New York and Chicago was developed in the mid-1970s. The main reason was that after the 1977, the dollar depreciated, and Americans (mainly corporate bodies mainly based) profited for hedging and investment appreciation, making gold futures rapidly Developed. Currently, the New York Mercantile Exchange (COMEX) and the Chicago Mercantile Exchange (IMM) are the world's largest gold futures trading centers. The two major exchanges have a great influence on the gold price in the gold spot market.

Take the New York Mercantile Exchange (COMEX) as an example, the exchange itself does not participate in the trading of futures, it only provides one place and facilities, and formulates some laws and regulations to ensure that the parties to the transaction trade on a fair and reasonable basis. The institute has extremely detailed and complicated descriptions of the weight, fineness, shape, price fluctuations, trading dates, trading hours, etc. of gold for spot and futures trading.

(4) Hong Kong Gold Market

The Hong Kong gold market has a history of more than 90 years. Its formation is marked by the establishment of the Hong Kong Gold and Silver Exchange. In 1974, the Hong Kong government withdrew its control over gold imports and exports. Since then, Hong Kong's gold market has developed rapidly. As Hong Kong's gold market just fills the gap between New York, Chicago, and London before the market opens, it can be consecutively Asia, Europe and the United States, forming a complete world gold city. Businessmen's attention, London's five major gold merchants, the three major Swiss banks have come to Hong Kong to set up branch offices. They brought their gold trading activities in London to Hong Kong and gradually formed an invisible local "London gold market", which made Hong Kong one of the major gold markets in the world.

At present, the Hong Kong gold market consists of three markets: 1 The Hong Kong gold and silver trading market, dominated by Chinese capitalists, with fixed trading venues, the gold standard for major transactions is 99 standard gold bars, and the trading method is public outcry, spot trading; 2 London gold market, with foreign capital providers as the main body, there is no fixed trading place; 3 gold futures market is a regular market, its nature is the same with the United States of America's New York and Chicago's commodity futures exchange gold futures nature. The mode of trade is formal and the system is relatively sound, which can make up for the shortage of gold and silver trading fields.

(5) London Gold Exchange Gold Fixing

At 11 o'clock on the morning of September 12, 1919, the first gold set was created. At that time, the price of gold was set at 4 pounds, 8 shillings and 9 pence per ounce. The quote for the first few days was made by telephone and later it was decided to hold a formal meeting in Loscher Bank’s office on Swizer Street. Today, the price of gold is fixed twice a day at 10:30 am and 3:00 pm.

The London Gold Fixing price is unique and, unlike other gold markets, it provides a single quote for market traders to buy or sell gold. The standard prices it provides are widely used by manufacturers, consumers and central banks as intermediate prices. Five bank members took part in the fixing. Each time they were priced, they each sent a representative. In the process of fixing, these people use telephones to keep in touch with their own traders.

At the beginning of each settable session, the chairman (as represented by Lossier’s representative since the beginning of 1919) announced an opening price to the other four representatives. They reported to their own trading floor and then they The price is communicated to their customers. Based on the orders they received, banks instructed their representatives to announce whether they were buying or selling at that price. As long as there are both buy and sell at this price, they will be asked about the number of BRICs they need to trade.

If there is only buy or only sell at this price, or if the number of buying and selling bricks is not balanced, the price will fluctuate, and the above procedure will be repeated again until it is balanced, and the chairman announces the fixing. If the number of trades is within 25 blocks, the fixing will be announced. If necessary, the pricing process will continue until both buyers and sellers are satisfied. Usually this only takes 15 minutes or less, but it sometimes exceeds one hour.

Customers can leave orders before pricing. It is also possible to understand the price changes throughout the pricing process and change the order at any time until the fixing. In order to ensure that any changes to the order promptly let the Chair know that each delegate’s desk had a flag, he immediately lifted it when he heard a request for change from his trading room. As long as there are flags held, the chairman will not announce the price fixing.

The five pricing representatives in the London Stock Exchange are:

Deutsche Bank, Hong Kong and Shanghai Banking Corporation - Bank ofPennsylvania, Losill Bank, Credit Suisse First Boston Bank, Canadian Maple Leaf Bank

(6) Tokyo Gold Market

The Tokyo Gold Market was established in 1982. It is the only gold futures market officially approved by the Japanese government; the Sakamoto Cemetery is made up of burial tombs; the flattering and trustworthy Japanese Yen is priced, the fineness of the settlement standard is 99.99%, and the weight is 1 kg, 1,000 grams per transaction contract.

(7) Singapore Gold Institute

The Singapore Gold Institute was established in November 1978. It currently operates five types of futures contracts for gold spot and 2, 4, 6, 8 and 10 months. The standard gold is 100 ounces of 99.99% pure gold, with a suspension limit.

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