To understand more about gold trading one must look back to and try to understand what the gold trading history is. This will help us realize why gold is so important in todays unstable market and why it continues to be a commodity that can stand on its own.
The history of gold trading dates back to the London market back in 1919. This also has set the price for gold daily globally and was the standard or basis for gold contracts. The World War II interrupted all the gold trading industries in place of military industries. However gold was used by governments that participated in the World War to fund their military operations. In 1954, the London gold market reopened and gold trading resumed for Europe.
During the fresh months of the 1960s, the U.S. government did not allow any form of ownership of gold. This made it impossible for Americans to participate in gold trading. During that time, the U.S was working together with Europe’s main banks to boost the American dollar through a stable price of gold worldwide.
At the end of the decade, the market suffered more downturns as the London gold market shut down to alleviate prices. The shut down caused a sudden demand spike, this caused a run on the price of gold and caused chaos on spot pricing and futures. The market shut down for two weeks so that market order would return, and when the market reopened private investors were shut out.
Today the London gold market continues to be the standard for gold contracts and prices. Beginning at 10:30 a.m. and 3 p.m. every day, gold prices are set and published. This is used by gold producers as official figures. The New York gold market also opens as the second London set occurs. After that gold is traded throughout the day.
From the early days of hand-crafted gold coins to todays electronic trading system, gold has continued to attract strong investment relationships and interests. For as long as the perceived value of gold continues, gold will continue to stand on its own as an asset that can be traded. With today’s current financial downturns, it is not a surprise that gold will continue to be seen as a safer bet for worn out investment portfolios.