of the price of Gold in London!
A Brief History of the Twice Daily London Fixed Price of Gold and Precious Metals
Courtesy of William Hanley (U.K. Market Eye)
LONDON - The financial district known here simply as The City is a hotbed of the loyal Order of the Masons, who have a penchant for strange rituals.
But Masonry has nothing to do with an odd little ceremony performed twice every day in an office at N.M. Rothschild & Sons Ltd.
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Five men talk on their phones for 10 minutes or so, and then lower tiny Union Jacks sitting on their desks. And that's it. The London gold fixings is
complete. It takes place at 10:30 a.m. and 3 p.m., like clockwork. The same ceremony has been performed the same way, in the same place, and with
mostly the same firms participating since the first gold fixing was enacted at Rothschild in St. Swithin's Lane on Friday, Sept. 12th, 1919.
Anachronistic or not, it works to give the gold market a snapshot of the spot price of gold at a particular moment in time.
When the five representatives met at Rothschild on that first Friday in 1919, gold was fixed at four pounds, 18 shillings and nine pence
- about USD$ 7.50 in today's terms. The quoted currency was changed to USD$'s in 1968, but very little else has changed in the intervening 77 years.
The participants at the first fixing were from Rothschild, which chaired the meeting and every subsequent one, Mocatta & Goldsmid, Pixley & Abell,
Samuel Montagu & Co. and Sharps Wilkins.
International gold trading is an around-the-clock business, with the London Market overlapping those of the Far East in the morning and New York
in the afternoon. London bullion traders can make deals from about 7:15 a.m. to 7:15 p.m. But twice a day the representatives meet face to face
at Rothschild to trade gold for physical settlement. The dealing unit is a Good Delivery Bar, which must weigh about 400 ounces and conform to
specifications for gold bars set down by the London Bullion Market.
The chairman suggests an opening price, which is reported by the representatives by phone to their dealing rooms.
The chairman then asks who wants to buy and who wants to sell and how many 400-ounce bars they wish to trade. If the quantities fail to
balance at the opening price, the chairman suggests a higher, or lower one, until a balance is achieved. Then he announces the price to be fixed.
The dealing rooms can alter instructions to their representatives at any time during the proceedings and that's where the tiny Union Jacks come in.
The representative signals he is changing his declared interest by raising his flag. The chairman can't declare the gold price fixed
unless all the flags are down. All this sounds very quaint and out of touch with computer-driven markets, but up to 20 tones of gold a day are
thought to be traded through the fixing.
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More About The Universe of Gold!
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The London Good Delivery Bar is manufactured by only a handful of companies to an exact weight of 400 Troy Ounces.
It has a volume of about 39 cubic inches--- and is about the size of a common brick or a small loaf of bread.
They weigh about 27.4 US Pounds. The London Bullion Market Association has additional information of possible interest. Click Here to access their web page.
Smaller bars, usually referred to as ingots, and Gold coins are usually kept
in a wall safe or secret hiding places by individual collectors or investors, while the London Bar is rarely,
if ever outside a secure, underground vault until it is acquired by an end-user who melts it down for
the manufacture of jewelry, dental or any of many industrial applications.
Units of weight measures commonly used in the gold trade include Grams which equal about 0.0321507465th
of a Troy Ounce and the Pennyweight which equals 0.05th Troy oz.
For smaller quantities, a Grain of Gold equals 0.002083333rd of a Troy Ounce for use in Jewelry and a variety of industrial applications.
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| Alloy - Gold mixed with other minerals, such as copper, iron, or silver. Alloys are often used in jewelry to add strength to the gold, which is inherently too soft to work by itself.
Alluvial Gold - Gold deposited by flowing water.
Amalgam - Gold or silver mixed with mercury.
Fool's Gold?
There are a number of minerals which are seen as shiny, golden flakes which are easy for people to believe they have
struck pay dirt. The most famous "fool's gold" is common Sulfide or Pyrite. A host of other minerals including
Chalcopyrite and Marcasite, and weathered flakes of Biotite have sufficient gold coloring to be taken as gold. |
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These bulky 400 Troy ounce Gold Bars, commonly known as London Good Bars are sold or traded between dealers on a sight
unseen basis. A new owner might change the storage site from a secure vault in
Switzerland to London or New York, the bar remains 100% intact until it is acquired by an end-user for meltdown and
processing for a variety of industrial applications- from dental work to electronics or jewelry.
(Click Here for more information about London Good Bars.)
Bullionvault, a London based company has developed the idea of allowing individual persons to buy and sell, or buy and
hold portions of these valuable but cumbersome items at true world market prices while they remain safely, and 100% intact in an underground
vault.
Although I cannot actually touch or fondle the modest amount of this fraction (0.0754kg) which I own in one of these 26.4 pound bars,
Bullionvault enables me to Buy gold bullion online.
quickly, safely and at low prices. which I can sell or add-to with a mouse click without the often unreasonable handling charges I would be paying the traditional dealers.
In addition to the ease and security in making purchases,
this excellent company gave me a completely free one-gram of gold to start my accumulation without strings, ifs, buts
or unpleasant surprises in my two years of dealing with them.
In fact, after visiting their site I was so impressed with their unique concept of doing business, that I urged my friends
to investigate the situation for themselves. When several or more of them were equally impressed,
I became what the BullionVault company call a Referrer--- that is, a person who generates business in exchange
for a modest commission which they pay the person out of their reasonable handling charges. [It's only a pittance,
of course, but a retired entrepreneur like me continues to enjoy the process of doing business.
The small amount which I receive is taken from the normal, and modest handling charges which are paid by every customer.]
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complimentary, risk free gift of one gram of the precious metal to start your personal hoard of it. [This
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