Bullion Commodities – Gold & Silver

‘Gold is the oldest precious metal known to man and for thousands of years it has been valued as a global currency, a commodity, an investment and simply an object of beauty’

Gold is a brilliant yellow precious metal that is resistant to air and water corrosion. It is a very soft and pure metal (24 Kt.). Gold is the most malleable and ductile metal found on earth. That’s why it is expensive and it is alloyed with other metals .

Major trading centers of gold
  • London (clearing house)
  • New York (home of futures trading)
  • Zurich (physical turntable)
  • Istanbul, Dubai, Singapore and Hong Kong (doorways to important consuming regions)
  • Tokyo
  • Mumbai (India’s liberalized gold regime)

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Purity And Contracts
  • Gold purity is measured in terms of karat and fineness:

Karat: pure gold is defined as 24 karat

  • Fineness: parts per thousand

Thus, 18 karat = 18/24 of 1,000 parts = 750 fineness

  • MCX Gold available on GOLD 1 KG, GOLDM 100 GM, GOLD GUINEA 8 GM, GOD PETAL 1GM Contracts
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Factors Influencing the Gold Market
  • Above ground supply of gold from central bank’s sale, reclaimed scrap, and official gold loans.
  • Hedging interest of producers/miners.
  • World macroeconomic factors such as the US Dollar and interest rate, and economic events.
  • Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures, or industry restructuring, all affect metal prices.
  • In India, gold demand is also determined to a large extent by its price level and volatility.

MCX India

Worlds 3rd Larget and India’d No.1 Commodity Exchange .

Comex

COMEX is a U.S. futures & options exchange for metals such as copper, gold, aluminum and silver. COMEX is a division of NYMEX.

Factors Influencing the Silver Market
  • Economic events such as national industrial growth, global financial crisis, recession, and inflation affect metal prices.
  • Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures, or industry restructuring, all affect metal prices.
  • Governments set trade policy (implementation or suspension of taxes, penalties, and quotas) that affect supply by regulating (restricting or encouraging) material flow.
  • Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.
  • A faster growth in demand against supply often leads to a drop in stocks with the government and investors.
  • Silver demand is underpinned by the demand from jewellery and silverware, industrial applications, and overall industrial growth.
  • In India, the real industrial demand occupies a small share in the total industrial demand of silver. This is in sharp contrast to most developed economies.
  • In India, silver demand is also determined to a large extent by its price level and volatility.
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