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Understanding the Precious Metal Price Charts

Precious metal price charts look at the current trading price of gold, silver, platinum and palladium. The actual definition, however, is something more complicated than that. Where you might be used to going into the supermarket and paying a fixed price for products like bread and milk, the price of precious metals changes constantly – in fact many times an hour.

Let’s start with the gold price. The value of gold is essentially determined by large scale exchanges, in ‘over-the-counter’ sales at the London Bullion Market Association (LBMA) and COMEX in New York. These sales involve thousands of troy ounces of gold at any time, with prices negotiated between the buyer and the seller based on economic factors like inflation, currency exchange rates, supply and demand and global political stability.

Amalgamating data from over the counter deals and other market data sources is what determines the gold spot price – a figure that is constantly updating as the market plays out.

The gold fix price, also referred to as the London gold fix, is set twice daily in London and is in effect an auction that arrives at a consensus price made by the permanent members of the LBMA. The twice daily gold fix price released by the LBMA is set at 10:30am and 3:00pm. This is given per troy ounce of fine gold – any gold that is 99.95 per cent purity or higher.

The best gold dealers adjust their prices in line with the market gold price adjustments in order to remain as competitive as possible. Then they usually charge their products at a small premium over the spot price.

What influences the gold price?

The price of gold is believed by many investors to be very reliable. The precious metal price chart tends to show gold holding its value, and gold prices tend to increase over a long period of time. This is particularly the case in times of low economic growth and high inflation – two factors that tend to correlate with high gold prices.

Gold is therefore considered a good way to secure wealth against uncertainty, as its value rises reliably over time, and sharply when other investments crash. The strength of large economies impacts prices, in particular the US economy. Weak economic forecasts and currency exchange rates for the American economy and dollar respectively tend to boost the price of gold. US Federal Reserve interest rates are also of interest to those buying and selling gold.

Overall one of the biggest factors influencing the price of gold is the phenomenon known as ‘safe-haven’ buying. Investors rush to gold in times of economic and political uncertainty, increasing demand and thus driving the price up.

Read more about historical trends affecting the gold price here.

What influences the silver price?

The silver fix price is set each day at 12pm BST (11am GMT) by the LBMA.

For many years in history, silver was the main precious metal used in currency. This is likely because gold wasn’t discovered in large quantities by early civilisations, it is far rarer, and its high level of malleability makes it difficult to use in circulating currency.

Many years ago, we derived the term ‘onepound’ from the weight of 240 silver pennies – a physical pound of silver. Individual pounds and pennies have become far less valuable since, but silver remains a popular traded commodity to this day.

Silver is a much less valuable metal than gold, lending it support among smaller scale investors wishing to enter the precious metals market without investing large sums of money. Historically, silver has been desirable since it’s a more volatile commodity than gold, meaning investors who are more open to risk have had opportunity to make profits from wild fluctuations in silver prices.

Silver prices are volatile because the metal is used more heavily in industry than gold, meaning that silver price chart fluctuations are governed by supply and demand among practical users of the metal as well as investors. The success of industries reliant upon silver, such as film, photography and electronics tends to govern silver prices.

Find out more about what historical trends have impacted on the silver price here.

What influences the platinum price and the palladium price?

Platinum and palladium prices differ from those of gold and silver. These prices are set twice daily, at 09:45am and 2pm, by the London Metal Exchange (LME).

Like silver, platinum and palladium are mined as a by-product of more common metals like nickel and copper, meaning that their supply rate is highly irregular. The rate of demand often changes regularly, as they are used to a large extent in the jewellery market; an industry in which changing tastes and fashions, as well as personal economic security, govern demand.

Platinum prices rose by 28.5 per cent between June and August 2016. Palladium, even more surprisingly, rose in value by 48.9 per cent over a period of three days in May 2017 – a figure that would be sure to make some investors very happy.

Unlike gold, the price of platinum and palladium tends to rise during periods of economic stability, and decreases during more uncertain times. This is likely because demand grows in industries like jewellery and electronics when people are feeling more economically secure, and show greater demand for products that contain platinum and palladium.

Whatever the current precious metal price charts are showing, investors will do well to secure a good price when buying physical bullion. At The Gold Bullion Company, all of our products are updated automatically based on the daily price changes, so you can be sure that whatever you buy from us, we’re selling at the most competitive price available.

Expand your precious metals portfolio today with our range of silver and gold investment-grade products here.