Gold mining and sales operations are controlled by the state. There is a black metal market, but actions on the "black" trading platform are criminally punishable. The advice of the authors of the arguments about “cheap” sand compared to bullion, as well as about “inexpensive” gold from Africa should be neglected. The value of gold is affected by:
- volume of mined and mined valuable mineral;
- global demand for gold.
The remaining assumptions are from the area of "let's talk about something." And now more about the nuances of the cost of the “yellow devil”, that affects the value of gold in the world market.
The appearance of gold
Gold is mined in bulk and in nuggets. Miners are paid $ 10 per gram for both sand and nugget. Deviations in the amount of remuneration for hard work are not approved and are suppressed by controlling structures.
Next comes the technology for processing the extracted raw materials, and the price rises.
Gold is smelted from primary material or smelted scrap of jewelry and recycling products of electronic components of industrial and household products. Granules are obtained. Pellets offer gold at $ 40 per gram.
Ingots are poured from gold granules, the price changes to $ 53 per gram of gold bullion.
Yes, the price is different. But the product is not like one another, although the only component is gold. Therefore, the statement that the appearance of gold affects the value of gold is partly true, if you do not take into account the added value created by metal processing.
The habitat of the "yellow devil"
Gold mining is evenly distributed across countries and continents. 70 countries are trading in yellow metal. In developed countries, apply the technique and technology. In developing countries, mining is done the old fashioned way, manually. Political instability hinders investing in geological exploration.
The percentage of production on each continent in relation to the mass of extracted precious metal changes annually.
In 2016, relative to 2015, the situation in gold mining looked like this:
Canada (+11.1%), Papua New Guinea (+8.3%), Peru (+3.4%), Indonesia (+3.1%), Ghana (+2.3%), China worked positively. (+1.1%).
Negative increase in production was established by Mexico (-7.4%), South Africa (-3.4%), Australia (-2.9%), USA (-2.3%), Brazil (-1.2%), Russia (-0.8%).
Companies that manufacture electronic gadgets and take things back out of order have a stock of metals. By processing boards from its own computers, laptops and phones, the American corporation with the logo in the form of a bitten apple in 2015 received $ 40 million worth of gold. The company has assets in the form of 27 thousand tons of metals, including one ton of gold. For comparison: China's gold reserves in 2016 amounted to two thousand tons.
World gold reserves
The value of gold is affected by the total amount of gold in the world mined for a quarter, for a year and for the period of civilization's interest in metal. 161 thousand tons of precious metal were withdrawn from underground pantries.
Estimation of the amount of extracted minerals is based on statistical monitoring of the use of metal in directions. According to 2015, the distribution structure is as follows:
- Jewelry in the form of jewelry - 79 thousand tons.
- Use in industry and in medicine - 17 thousand tons.
- Investments in bank coins and bullion - 24 thousand tons.
- State and international banks - 30 thousand tons.
What affects the price of gold
The volume of mining and market manipulation are two fundamental parameters of metal market pricing. Every day there is news about gold deposits and mined volumes. On exchanges, the price of gold is affected by both growth and a decrease in the rate of precious metal mining.
Gold is a non-renewable resource. The more metal mined, the less remains in the bowels, and the higher the price will be on world markets. One “but”: the attractiveness of investment in geological exploration is declining. Search and development of deposits requires financial, technological, human resources. The investor is confident in the regular receipt of income after putting the field into operation. Import sanctions, export sanctions are alarming and take away the desire to develop the gold mining industry.
Excess of supply over demand leads to lower prices. Therefore, mining companies at times artificially lower production volumes in order to create an opinion among consumers about a shortage. The reaction of the buyer is psychologically calculated. In response to the information “not enough for everyone”, rush demand begins, purchases increase, quotes grow.
London is the center of the golden price universe. The London Metal Exchange sets the price for a troy ounce of gold. The rest involved in pricing within countries accept the team for execution. Paper money is dust. Gold is the true value.
Precious metal investment
They acquire gold in three legal ways:
1. Buying bullion.
2. The acquisition of investment coins.
3. Opening a depersonalized metal account.
Price difference. In the first option, there is an 18% VAT tax, which is paid upon purchase and is not refunded to the buyer upon return. In the second and third version of the tax there is no according to the Tax Code of Russia, Art. 149. Therefore, the option works: buy an ingot, rent a cell in a bank to store the purchase, and open an anonymized metal account. Both reliably and on taxes save.
Current price of a troy ounce of gold
Gold auctions are held twice a day at the London Metal Exchange. On world exchanges, the price of a troy ounce is set in dollars. At 13:30 and 18:00 Moscow time, the Central Bank of Russia receives an indicator - London Gold Fixing - and calculates the accounting price of gold in rubles, in accordance with the official dollar exchange rate. The accounting price of gold in the Central Bank as of May 6, 2017 is 2331.61 rubles per gram. For the last three months, the gold exchange rate at the Bank of Russia has fluctuated between 2250-2350 rubles per gram. At the same time, the price of gold in London on May 09, 2017 amounted to 1220.4 dollars per 31.2 grams.
Gold bullion is traded on exchanges. The main parameters of the lot are weight and sample.
And the talk that the gold’s price is affected by the appearance of gold, the place of extraction, is appropriate in advertising campaigns of jewelry firms.
To whom to sell the accumulated gold
Sand - to the state. There are no options.
Ingots to a jar. Attach the certificate with the weight to the bar. The bank will refuse to accept an ingot without a certificate. The discrepancy of weight between the figure in the certificate and on the scales is permissible in the amount of 0.01 grams. If the ingot is damaged by scratches, dents, or other means, the appraiser will reduce the price of the product, even if the weight matches the figure in the certificate.
Coins - bank, pawnshop, collectors.
The price of gold is affected by the demand for gold. States replenish reserves, private individuals seek to minimize the risks of political disasters. Gold does not rust and does not become cheaper. The price of metal in the short term fluctuates, but a fifty-year observation period shows that the market trend is an increase in price. Investing in gold is a reliable way to protect what you have gained.
Trump attacks
Political uncertainty in the developed countries of the world is at the mercy of the central players of the London Metal Exchange. Dismissal of people from government posts in the United States immediately affects the cost of a troy ounce.
Naive people continue to ask what affects the price of gold: type, place of extraction, world reserves. Today, the resignation of the head of the FBI affected. US President Donald Trump builds a team for himself. The initiative of the newly elected friend of Russia will still bring many surprises in the precious metals market.
