Gold market price usually refers to the London Afternoon closing price for fine (99.99% pure) gold which is the benchmark price used each day in the gold industry. This gold market price is also used in calculating GoldFellow®’s scrap prices for karat gold each day and GoldFellow® posts these prices per pennyweight on its website.
The way the gold market price or – London PM Fix – is determined is through consensus by the voting members of the London Bullion Market Association. The members convene by conference call and the fix is set when the call concludes. Even though the gold market price is fixed, the buy and sell prices for gold on the world commodities markets continues to change minute to minute.
Gold market prices are sensitive to investor behavior influenced by a variety of factors. These factors include economic and political events which have been driving up gold prices significantly over the last two years. For example, gold market prices have been impacted by investors looking for a safe haven due to concerns about possible inflation fueled by an increase in the global monetary supply. And, the volatility of stock and oil prices have also sent investors looking for a safe haven for their capital. Many chose to invest in bullion which has become in short supply due to increased demand and interest from new investors. The market price of gold has nearly doubled in the last two years.
In addition to investors purchasing gold as a storehouse of value in uncertain economic times, consumers have also benefited by the high gold market price. GoldFellow® has seen an increase in the number of consumers who chose to take advantage of the high gold market price by selling old, unwanted scrap gold to the company.