Gold rose to a record above $ 1,436 per ounce on Wednesday to spread the unrest in the Middle East and North Africa of the polished metal safe haven appeal.
Here are some facts about the market and different ways to invest in precious metals.
HOW I invest?
SPOT MARKET
Large buyers and institutional investors generally buy the metal of the major banks.
London is the center of the global spot gold market, with more than $ 26 billion transactions from the adoption of the city system every day. To avoid the costs and security risks, bullion is not usually physically moved and deals are cleared through paper transfers.
Other major markets for physical gold are India, China, the Middle East, Singapore, Turkey, Italy and the United States.
Futures Markets
Investors can also enter the market via futures exchanges, where people trade in contracts to buy or sell a particular product at a fixed price at a specified future date.
The COMEX division of the New York Mercantile Exchange is the world’s largest gold futures market in terms of trade. The Tokyo Commodity Exchange, popularly known as TOCOM, is the most important futures market in Asia.
China launched its first gold futures contract on January 9, 2008. Several other countries, including India, Dubai and Turkey, have also launched futures exchanges.
Exchange-traded funds
Media attention to high gold prices has also attracted investments into exchange-traded funds (ETFs), those securities backed by physical metal, and people from exposure to the underlying gold price can be obtained without the acquisition of the metal itself.
Gold in New York SPDR Gold Trust, the largest gold-backed ETF, rose to a record high of 1,320.436 show in June. The ETF’s holdings are equivalent to about half of my annual global supply and are worth around 56 billion U.S. dollars, at today’s prices.
ETFs iShares COMEX gold include Gold Trust ETF Securities Gold Bullion Securities (GBSx.L) and ETFS Physical Gold (PHAU.L) and Zurich cantonal bank Physical Gold (ZGLD.S).
SOURCE:reuters
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