The combined fund account of the government is managed by the Bank of England, who provides their banking services for the government. Apart from acting as a banker for the government, it also handles the gold reserves, and foreign exchange of England. The bank of England is the hub of all banks, and it is the last option for borrowers to get money. It also has full rights to issue banknotes since the Bank Charter Act in 1844, solved the matter of gold reserves with bank notes.
The price of gold like all other commodities are determined by supply and demand. Although unlike other commodities, gold cannot be consumed, and all the gold that was mined previously still exists. In effect, this means more fluctuation, and that it can come on the market again to be sold, when the price is right.
Central banks and the IMF play an important role in the price of gold. It is said that at the End of 2004, the central banks and official organisations held 19% of the total amount of gold that was mined. European central banks, such as the Bank of England, and the Swiss National Bank have been significant in the list of sellers of gold since 1999.
A series of five banks have a close connection with each other, and they follow the clearing mechanism of the London gold marketplace. These five banks are the HSBC Bank, JP Morgan Chase Bank, UBS, Deutsche Bank AG, and the Bank of Nova Scotia. These acting clearers are responsible for the gold all over the world, which is being shipped to England. Once the clearing mechanism is applied, jewellery makers can take it. However, the clearers also have their own customers, who deal directly with them.
In addition to the five clearers, the Bank of England clears total gold positions everyday by making transfers into unallocated accounts, in respect of the trading practices of each clearer. The Bank of England is not one of the five clearers, but it is still the chief clearer for the LBMA. If they want to, they can generate supply by creating unallocated liabilities on their balance sheets, or they can create scarcity by buying gold back from the clearers, and reducing the bullion rate, in theory or reality, in market circulation.
Apart from the five clearers handling the gold price, the Bank of England acts as the cheif of the clearers, and manages all London gold clearning mechanism. They simply check the daily gold positions and keep them in unallocated accounts. In order to variate the supply and demand, the Bank of England constantly create waves in the balance sheet, and also buys off gold from the clearers. This keeps the market of gold getting circulated constantly.
Four important market makers are responsible for managing the gold fix, which acts as a major apprehension of the Over the Counter Trading. Society General, HSBC Bank USA London Branch, Deutsche Bank AG, and the Bank of Nova Scotia are in the list of these major market makers. The gold fix maintains to set a fixed rate for the gold in the market, allowing all traders to buy and sell at a fair price. The parties of the market makers hold an auction twice a day, during the day, afternoon and evening in London. This auction is organised to ensure that the selling orders for gold are as per the buying orders. Internet and newspaper provide quick and easy information on the price of gold, which help in providing guidance to people having interest in gold. Traders of gold use this technique in setting a fixed price for gold. - 29871
The price of gold like all other commodities are determined by supply and demand. Although unlike other commodities, gold cannot be consumed, and all the gold that was mined previously still exists. In effect, this means more fluctuation, and that it can come on the market again to be sold, when the price is right.
Central banks and the IMF play an important role in the price of gold. It is said that at the End of 2004, the central banks and official organisations held 19% of the total amount of gold that was mined. European central banks, such as the Bank of England, and the Swiss National Bank have been significant in the list of sellers of gold since 1999.
A series of five banks have a close connection with each other, and they follow the clearing mechanism of the London gold marketplace. These five banks are the HSBC Bank, JP Morgan Chase Bank, UBS, Deutsche Bank AG, and the Bank of Nova Scotia. These acting clearers are responsible for the gold all over the world, which is being shipped to England. Once the clearing mechanism is applied, jewellery makers can take it. However, the clearers also have their own customers, who deal directly with them.
In addition to the five clearers, the Bank of England clears total gold positions everyday by making transfers into unallocated accounts, in respect of the trading practices of each clearer. The Bank of England is not one of the five clearers, but it is still the chief clearer for the LBMA. If they want to, they can generate supply by creating unallocated liabilities on their balance sheets, or they can create scarcity by buying gold back from the clearers, and reducing the bullion rate, in theory or reality, in market circulation.
Apart from the five clearers handling the gold price, the Bank of England acts as the cheif of the clearers, and manages all London gold clearning mechanism. They simply check the daily gold positions and keep them in unallocated accounts. In order to variate the supply and demand, the Bank of England constantly create waves in the balance sheet, and also buys off gold from the clearers. This keeps the market of gold getting circulated constantly.
Four important market makers are responsible for managing the gold fix, which acts as a major apprehension of the Over the Counter Trading. Society General, HSBC Bank USA London Branch, Deutsche Bank AG, and the Bank of Nova Scotia are in the list of these major market makers. The gold fix maintains to set a fixed rate for the gold in the market, allowing all traders to buy and sell at a fair price. The parties of the market makers hold an auction twice a day, during the day, afternoon and evening in London. This auction is organised to ensure that the selling orders for gold are as per the buying orders. Internet and newspaper provide quick and easy information on the price of gold, which help in providing guidance to people having interest in gold. Traders of gold use this technique in setting a fixed price for gold. - 29871
About the Author:
Jack Wagon is a gold investment consultant. You can take his assistance to gold bullion. For more information about buying gold you can visit his recommended website at http://www.goldmadesimple.com/
