Gold Price The Trend That Has Been

Gold price is determined through its trading in the derivatives and gold market. However, the benchmark price of gold across the world is provided by a process called gold fixing. This originated in September 1919 in London. Since then, it has determined the benchmark gold price in the world. For the US markets, the benchmark gold price is given by the afternoon gold fixing.
Gold price depends on the weight and purity of the metal. Being one of the highly traded metals across the world, its price is quite fluctuating. Troy weight and grams is the measurement of gold, just like all other precious metals.
Gold, by itself, cannot be molded into any shape. It has to be mixed or alloyed with other metals. When alloyed, the amount of gold present in that piece is indicated by a universal measure. This measure is known as karat. 24 karat represents pure gold and as the rating goes down, the gold content also reduces proportionally. Gold purity can also be measured in decimals ranging from 0 to 1. This is known as millesimal fineness. This is mostly done in the case of gold coins and bars. Here, a decimal figure of 0.995 indicates pure gold.
Historically, gold coins were used as currency. Initially, when paper money was introduced, it was used more as a receipt for redeeming gold coins. In the gold standard economic system, a unit of currency was equivalent to a certain measure of gold. The value of the US dollar was set in such a way that one troy ounce of gold was equal to $20.67. This was set by the United States government and was followed for a very long time. This changed in 1934, when the dollar was devalued. Now, a troy ounce of gold costs $35.00.
As the demand for gold kept increasing, it also increased the difficulty of maintaining the gold price at a controlled level. As a result, in the year 1961, a number of banks from United States and Europe formed a pool and decided to manipulate the market to control currency devaluation. This pool of the banks dissolved in 1968.
A two tiered pricing scheme was introduced in its place, in 1968. These were – one, the gold price used to settle international account was by using gold at the old rate of $35.00 per troy ounce. And two, the gold price in the private market could fluctuate.  This method was however, abandoned in 1975. Now, the gold price was left to determine its free market level.
Historical gold reserves are still held by the Central banks as a ‘store of value’. This level of gold
The United States Federal Reserve Bank in New York and the United States Bullion Depository at fort Knox has the largest gold depository in the world. Each account to almost 3% of the gold mined across the world.
As per London gold fixing, the gold prices have been fluctuating since 1968. The gold price was at its height in January 1980 at approximate value of $850.00 per troy ounce. But in June 1999, it went down to around $252.90 per troy ounce. The markets were generally in a bearish condition between the years 1999 to 2001 across the world. Though the gold prices were fluctuating, they started to increase from 2001, rapidly.
Since April 2001, gold prices have jumped and have more than trebled the value of US Dollar. Experts declared it to have come out of the bearish phase and entered into a bullish phase.
The high gold price of 1980 was exceeded only in 2008. The London Gold Fixing, in January 2008 had set a new maximum at $865.35 per troy ounce. This was perhaps the beginning of the rise of gold prices across the world. In March 2008, the London Gold Fixing recorded another historical gold price, then at its all time high, at $1023.50 per troy ounce.
The fall of 2009 saw a weakening of the US dollar and an increase in the demand for gold. This was reason enough for the gold price to shoot up. Thus, in December 2009, the gold market gained a rapid momentum and the gold price per troy ounce closed at $1215.
May 2010 saw the gold prices hitting its record height yet again. Now, this was mainly due to the European Union Debt Crisis. Because of this crisis, the purchase of gold as a safe asset class increased.
The gold price is going to have an upward or a bullish momentum in the near future as well, considering the trend that has been. But, like any other asset class, it also has its own price cycle and would see a bearish phase again. That would be the best time to stock on gold.
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