Gold, silver, and other precious metals are known to be generally safe investments because they tend to hold or increase their value over time. Lately, gold prices have reached a historic high so that everyday investors—not just precious metals traders—have become interested in buying and selling gold or silver. If this describes you, you should first understand how gold and silver prices are set. Coins & Stuff, a respected jewelry repair shop known for buying and selling gold in High Point, NC, explains below how markets arrive at precious metal prices.

How Are Precious Metals Prices Set?

The LBMA Gold & Silver Prices

Participants in the precious metals market are buying and selling gold and silver 24 hours a day throughout the world in a vast number of over-the-counter markets. In these, unlike in a stock exchange, there is no closing price. Instead, the administer of the London Bullion Market Association (LBMA), an international trade association of gold buyers and sellers, fixes the LBMA Gold Price through an electronic auction process. Participants input buy or sell orders, and the price moves up and down as supply and demand change. Then, twice per day—at 10:30 am and 3:00 pm, London time—the administrator publishes the current LBMA Gold Price in U.S. dollars. For silver, once per day, at noon, the administrator publishes the LBMA Silver Price.

Futures Pricing

The price of precious metals is also determined by activity in the futures market. Every day, traders—including investors, industrial precious metals buyers, and jewelry manufacturers—are buying and selling gold and silver shares on the futures markets in large exchanges around the world. Precious metals "futures" are agreements to buy and sell shares of the underlying commodity at a future date. The expectation that prices will rise or fall in the near or long term thus contribute to the current price buyers are willing to pay.

As you can see, multiple factors contribute to the price you pay for precious metals. If you're interested in buying or selling gold or silver, contact Coins & Stuff, the premier coin dealer and jewelry repair shop in High Point, NC. They've been serving the Piedmont Triad since 1980 and have become a trusted fixture of the business community. Visit their website to view a map and store hours, or call (336) 885-5323 to have your questions answered.