World Gold Council, gold investment value as a global currency and commodity.

Frequently Asked Questions

  1. How can I buy or sell gold?
  2. Where can I buy gold?
  3. Am I better off buying bullion bars or coins?
  4. How can I contact a bullion dealer?
  5. How do I know if a gold dealer is reliable?
  6. What are GAPs and where can I buy them?
  7. Where can I buy gold options?
  8. Where can I find the daily gold price?
  9. Where do we get our gold price from?
  10. What is the weight of gold value in spot price?
  11. How much is a gram of gold worth?
  12. What is the gold “fix”?
  13. Where can I find futures prices?
  14. What are the LBMA clearing statistics?
  15. What is the difference between the HUI index and the XAU index?
  16. Can you comment on historical returns of gold vs stocks?
  17. What are the major gold exchanges and how long have they been around?
  18. Do gold mutual funds invest in gold?
  19. Does the demand for gold follow a seasonal pattern?
  20. What is the average cost of mining per ounce?
  21. How much gold is still underground?
  22. What is the average gold mining grade?
  23. Where is gold mined?
  24. How much gold has been mined?
  25. What is the WGC?
  26. Market Jargon explained.
  27. If you inflation-adjust the previous gold price record of $850/oz set in January 1980 you get a value of around $2,200/oz, does that mean that gold is no longer an inflation hedge?
  28. What would a US recession imply for the gold price?

 

 

  1. How can I buy or sell gold?

    Our How to Buy section describes various ways that investors can gain access to gold, while a list of contact details is available in our Where to Buy area.
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  2. Where can I buy gold?

    Where you can buy gold depends on the form of gold you wish to buy and where you are physically located. Our How to Buy area outlines the various forms gold investment might take, while in Where to Buy, you can see the available forms by country, along with outlets.
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  3. Am I better off buying bullion bars or coins?

    Bullion bars and coins are priced on the basis of their fine gold content. However, different premiums may be charged by the same dealer, depending on the availability of each type of bar or coin. You may also want to check, at the time of purchase, how much commission would be charged to buy back any bars or coins should you wish to trade them in the future. Apart from your individual preferences for the way bullion coins and bars look, the premium charged over and above the gold price would probably be the deciding factor.
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  4. How can I contact a bullion dealer?

    The term “bullion dealer” generally refers to investment banks dealing in bullion. They may also be termed “bullion banks” and are members of the London Bullion Market Association. Bullion banks are “wholesale” suppliers and as such deal in large quantities (typically over 1000 ounces). They may service private clients wishing to deal in large quantities but normally this trade would occur via the client’s private bank. It’s worth noting that although only the London address and telephone number may be provided for some bullion dealers, they are large organisations and most have offices around the world. Investors wishing to deal in relatively small amounts of bullion coins and bars should examine the options available to them – see our How to Buy area. Contact details for a number of gold dealers trading smaller amounts of bullion coins and bars to the general public are available in our Where to Buy section.
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  5. How do I know if a gold dealer is reliable?

    The same counterparty risks apply to the gold dealing community that apply to any other industry. Gold dealers listed on our website have satisfied our due diligence procedure but a listing on our site is not and should not be construed as an endorsement or guarantee on our part.
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  6. What are GAPs and where can I buy them?

    GAPs stands for Gold Accumulation Plans which are available to Japanese investors wishing to save gold systematically over time.
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  7. Where can I buy gold options?

    All the bullion banks trade in gold options. However, this route would require you to have an account as a private banking client. Opening up a private bank account requires the bank to fulfil a thorough due diligence process that may take some time. A list of bullion banks is available from the London Bullion Market Association (LBMA). A second way of trading options is through the COMEX Division of the New York Mercantile Exchange but non-US residents should check with their financial advisors and the local regulatory body regarding the position with respect to trading by way of a foreign exchange. The third route that you could explore would be to contact a futures broker and ask what is available. Certain spread-betting companies trade gold options, for example. Please note that this information is provided for your convenience only and should not be regarded as investment advice or a recommendation to buy or sell gold options or futures. You should seek advice from a qualified financial advisor who should take your personal financial situation into account.
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  8. Where can I find the daily gold price?

    The gold spot price, quoted in US dollars per troy ounce, is updated every minute on our website. You can also view charts or download the daily gold price in a range of currencies in our Statistics area.
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  9. Where do we get our gold price from?

    The price quoted on our website is updated every minute and is provided by TheBullionDesk. The Price feed is a composite feed that will always show the latest bid and ask price. The composite feed is formed by pooling prices from a collection of price contributors and therefore should not be construed as a tradable price.
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  10. What is the weight of gold value in spot price?

    The spot price quoted on our website is the US dollar price of one fine troy ounce of gold, deliverable in London in a form that conforms to London trading standards.
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  11. How much is a gram of gold worth?

    The gold price is usually quoted in US dollars per troy ounce. To calculate the cost of one gram of gold, divide the US dollar price for one troy ounce by 31.1035 (one fine troy ounce is equal to 31.1035 grams).
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  12. What is the gold “fix”?

    The market-clearing price of gold set twice a day in London is commonly referred to as the London fixing price (AM or PM). This price, which is the international benchmark price, is set in US dollars per fine troy ounce of gold.
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  13. Where can I find futures prices?

    Futures prices are quoted on NYMEX, CBOT and TOCOM.

  14. What are the LBMA clearing statistics?

    Published on a monthly basis by the LBMA, the London clearing statistics measure how much gold and silver is transferred on a net basis between the clearing accounts held at the six clearers. As each transfer may be the result of multiple transactions, the figures are likely to represent a fraction of actual turnover. Only the debit side of each transfer is recorded. Daily averages for three sets of measures are released: the number of ounces transferred, value (based on the average monthly London pm fixing for gold and the average monthly London fixing for silver) and the number of transfers.
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  15. What is the difference between the HUI index and the XAU index?

    HUI is the code used for the Amex Gold BUGS (Basket of Unhedged Gold Stocks) Index comprises 15 gold mining companies which are largely unhedged or have a policy of being unhedged. More information is available directly from the American Stock Exchange (Amex). The XAU index is an index of shares of gold and silver mining companies listed on the Philadelphia Stock Exchange. It includes a total of twelve producers who may be hedged or unhedged.
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  16. Can you comment on historical returns of gold vs stocks?

    On average, across markets and across time, historical returns on gold tend to be unrelated to those on stocks, as represented by a number of stock market indices. This is of interest to investors seeking to diversify their portfolios. The correlation of returns on stocks and those on gold are reported in our Investment Statistics for a range of countries and are updated every quarter. In addition, our Research area contains a number of papers dealing with this subject.
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  17. What are the major gold exchanges and how long have they been around?

    The Chinese Gold and Silver Exchange Society in Hong Kong registered under this name with the government in 1918, although trading had been taking place with a degree of rules and regulations since 1910 (as the "Gold and silver exchange co").
    1. The COMEX division of NYMEX began trading on 31st December 1974.
    2. TOCOM began trading on 23rd March 1982.
    3. CBOT began trading on 20th February 1979.
    4. The Istanbul Gold Exchange began trading on 26th July 1995.
    5. MCX began trading on 10th November 2003.
    6. NCDEX began trading on 15th December 2003.
    7. The Shanghai Gold Exchange began trading on 20th October 2002.
    8. TurkDEX began trading on 4th February 2005.
    9. DGCX began trading in June 2005.
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  18. Do gold mutual funds invest in gold?

    Many gold mutual funds simply invest in the shares of gold mining companies, although some do invest in physical gold. The composition of the fund should be available in the prospectus for each fund. For more information on gold-oriented funds, please see How to Buy.
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  19. Does the demand for gold follow a seasonal pattern?

    There are seasonal patterns to jewellery demand, although the pattern varies from one country to another. Global demand is usually strongest in the fourth quarter of the year, followed by first quarter demand. The main elements governing this are:
    • Western world: Christmas
    • Islamic world: Eid Al Fitr at the end of Ramadan is a major gold giving occasion. Since the Islamic year is ten or eleven days shorter than the calendar year, the date of Ramadan moves each year. In 2006 the Eid Al Fitr was on October 23rd. Eid Al Adha (Feast of Sacrifice) takes place seventy days after the Eid Al Fitr and is also a significant gold-giving occasion. In 2006 Eid Al Adha fell on December 31st. Pilgrims going to Mecca and Medina may also buy gold; the main pilgrimage period, the Haj, culminates around the time of the Eid Al Adha.
    • India: gold buying peaks during the wedding season and at the times of various festivals that vary from region to another. The biggest festival is Diwali, which usually falls in late October or November. The wedding season varies from region to region but is normally from November to May with a break from approximately mid-December to mid-January. In August, the two-week Shrad period is inauspicious for ceremonies associated with gold buying; every three years or so this is followed by an additional month (Adik Mas) which is also not a time for gold buying. (Exact dates vary since the Hindu calendar is a lunar one.)
    • China and East Asia: Chinese New Year (last part of January or first half of February).
    • Turkey: Demand is highest in the third quarter due to tourist purchases. The effect of a festival would normally show up earlier than the date in gold sales since people purchase in advance. Also, since data often represents retail or wholesale purchases demand may often reflect distributors stocking up for the season. The seasonal pattern does not affect price; it is well known in the gold markets and therefore discounted. There are many other factors in addition to demand which affect the price of gold.

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  20. What is the average cost of mining per ounce?

    The average cost of replacing and producing an ounce of gold rose to $428/oz in 2005, a ten-year high, according to Metals Economics Group, based on a study of 18 major gold producing companies. However, costs vary widely between companies and the mines themselves.
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  21. How much gold is still underground?

    The major gold producers increased their reported reserves to 719.7 million oz or over 22,000 tonnes at the end of 2005, according to Metals Economics Group. Assuming a 10% recovery loss when the ore is extracted, this would amount to 14 years of gold production at 2005's level. In practice the amount of known resources remains fairly constant over time since the results of new exploration finds replace those resources that are exploited.
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  22. What is the average gold mining grade?

    The grade of ore refers to the proportion of gold contained in the ore of a particular mine and is quoted in grams per tonne (g/t). The type of mine depends on the depth and grade of the ore. At a rough estimate, the larger, better quality South African underground operations are around 8-10g/t (Anglogold), while the marginal South African underground mines run at around 4-6g/t. Many of the operations elsewhere in the world are open pit mines, which run at lower grades, from as little as 1g/t up to around 3-4g/t. A more significant piece of information than average gold mining grade is cost per ounce, which is a combination of grade (grams/tonne) and operating costs (USD/tonne).
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  23. Where is gold mined?

    Gold is mined on every continent, barring Antarctica. For more details, please see Mine Production.
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  24. How much gold has been mined?

    The best estimates available suggest that the total volume of gold ever mined up to the end of 2006 was approximately 158,000 tonnes, of which around 65% has been mined since 1950.
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  25. What is the WGC?

    The World Gold Council (WGC) is an association of the world’s leading gold producers dedicated to the promotion of gold.
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  26. Market Jargon explained

    Click here to have market jargon explained.
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  27. If you inflation-adjust the previous gold price record of $850/oz set in January 1980 you get a value of around $2,200/oz, does that mean that gold is no longer an inflation hedge?

    Inflation-adjusting the $850/oz peak set in January 1980 would indeed give a figure of c. $2,200/oz. However, the gold price only fixed there for one day. Three weeks earlier it was trading at $473/oz, a price it had risen to gradually over the previous three years, and a week later it was trading at $673/oz. Inflation-adjusting from $850/oz is an extremely biased starting point. It would be more objective to “smooth” this temporary spike. A trend line drawn through the daily gold price between 1979-1981, for instance, gives a much more impartial starting point of c. $470/oz for January 1980. In today’s money that would put gold at c.$1,200, close to the recent record of $1,011/oz set on March 17 2008.
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  28. What would a US recession imply for the gold price?

    Regression and correlation analysis suggest there is no relationship between changes in US GDP growth and changes in the gold price. Consequently, a US recession would not have negative implications for the gold price. This reflects the unique drivers of the gold price and underpins gold’s role as a diversifying asset. The only element of demand likely to be affected by a recession is investment demand, but that in turn will depend on the “type” of recession. So far, the brewing US recession has been positive for the gold price, as it has been accompanied by a rise in inflation and a falling dollar, which has boosted demand for gold as a dollar and inflation hedge. For a full discussion, see What does the US recession imply for the gold price?, by Natalie Dempster, at www.gold.org.
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