The price of gold is going up. It might be a good time to consider selling your old gold jewelry or other gold items you have sitting around collecting dust. Take a look at what’s happening in the world of gold. It’s all coming up roses and it may be time to cash in while the getting is good.
Here are some facts about gold to shed some light on how it is priced and traded:
Spot Price represents the price at which the commodity may be exchanged and delivered upon now. The spot price for a troy ounce (31.103 grams) of gold in U.S. dollars (USD) is driven by speculation in the markets, currency values, current events, and other factors, and is used to determine the exact price and changes every couple of seconds during market hours.
How spot gold prices are determined
Gold is traded worldwide and the spot gold price is calculated using data from the front-month futures contract traded on the COMEX. Gold pricing is fixed or set by the London Gold Fixing Company twice a week at 10:30 AM and 3:00 PM GMT. This price is determined by certain LBMA market makers, including representatives from Scotiabank, Deutsche Bank, and HSBC. Gold is always traded in USD.
Bid and Ask prices
Bid prices represent the current maximum offer to buy, and Ask prices represent the current minimum offer to sell.
Actual purchase price vs. spot price
The spot price does not factor in a dealer, distributor, or minting markups. The spread between their buy and sell prices represents the dealer’s gross profit. This will figure in the valuation of your old jewelry or other gold items.
The price of gold is the same all over the world
The price for an ounce of gold is the same all over the globe. Gold can be highly volatile, but the price can stagnate during quiet periods. Many factors affect volatility. Gold may be a “safe-haven” asset because it has almost no counterparty risks and needs no performance by outside entities to retain its value. However, there are times when gold and the stock market move together.
Gold is traded all over the world around the clock. Banks, financial institutions, and retail investors can access the gold market worldwide. Gold spot prices change every few seconds during market hours and can fluctuate throughout the course of a day.
Gold as an investment
You can invest in gold in the form of bullion or paper certificates. Physical gold is found in bar, coin, and round form. Purchasing gold certificates is another option. A gold certificate is a piece of paper evidencing ownership at some other location. Some investors prefer to hold their precious metals in hand.
An alternative investment strategy is the gold futures contract that insures the sale or purchase of gold at a certain price on a specific date. The price of the futures contract can fluctuate between now and then. Obviously, there is a higher risk in a futures contract as it is based on speculation.
Gold products, especially gold coins, are priced based on gold content and their collectability. The collectability premium may have wildly different market values based on the mint, rarity, and condition. These factor into the valuation of your jewelry or other gold items such as coins, so proceed with caution. Consider trading up to something of higher collectible value. We can help you.
Certain states place sales taxes on physical precious metals such as gold. When buying online, internet retailers will only charge you sales tax if you are an in-state customer, and if the state does indeed tax precious metals.
An Assay is a certificate or encasing that guarantees the purity and authenticity of the accompanying gold piece. Assays typically include a serial number, which will match the serial number imprinted on the bar. Assays will also include a signature by the official assayer of the piece.
With gold hovering around $2,000 per ounce, now is an opportune time to reevaluate your gold jewelry collection and recycle it into something new. Visit our gallery or give us a call for a complimentary consultation.