How is Gold Traded on The Stock Market?

How is Gold Traded on The Stock Market?

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With the expansion of gold trading as a desired commodity from investors, the need for more tools that contribute to the rapid purchase and sale of the precious metal has grown.

Gold trading on the futures market is the most important tool. The price action has been dramatic since the USD / USD pegged off from US President Nixon in 1971, resulting in a rise of around 2200% in its price. The nine years following the resolution.

The price of an ounce was around $ 800 in 1980, before falling into a 19-year downward trend of $ 260 in 1999, reversing a new record high of over $ 900 in September 2011.

Many gold price traders may not know how gold is traded through the futures market and CME, the world's largest commodity futures market.

How does gold reach the futures exchange warehouse?

It is not complicated: after obtaining the gold in high purity, after mining, or in the form of scrap "in the form of broken and used pieces of jewelry and jewelry," and refining and production of its alloys in factories and refineries with the standard specifications are recognized, ready for delivery.

Gold bars and bars are either owned by refineries that have already bought them from mines or are refined and refined to external customers.

Companies operating in this field must have a registered and recognized trademarks such as the German Heraeus Group, founded in the mid-19th century, whose work not only depends on gold but also silver and other precious metals.

How is the transfer performed? And who does it?

After the production of gold bullion standard specifications, the role of companies specializing in security systems to be transferred to warehouse stores, "COMEX", and can be done only through the process of certified companies and reliable.

If gold bars and bars are removed from CFE stores, the CME Group cannot guarantee that they remain within the established standards and standards, and if the owner wishes to return them, this should be done by the above companies in the same way.

When will gold bullion be traded on the stock exchange like stocks and others?

After the bullion arrives at the stock exchange futures stores in a proper manner, they become "eligible for trading", as delivery receipts are released and gold becomes "registered" shares.


These receipts operate as proprietary instruments that can be transferred from one party to another, while the holder pays the costs of storage. Most often, these receipts remain with the brokering company that carries out the brokerage process. Which traders do not consider to acquire but to profit from.