The mechanics of the global gold market

The Gold Observer/Jan Nieuwenhuijs/10-7-2021

photograph of a watch mechanism

“The price of physical gold is set by supply and demand for physical gold. The global physical market can be divided into exchange trading and bilateral trading. In addition to the physical market there are multiple gold derivate markets that influence the physical market. To understand the entire machine, we will examine the workings of gold exchanges, bilateral trading (networks), and derivate markets separately, and finally how all derivatives are tied to the physical market. Derivatives are traded on exchanges and on a bilateral basis as well, but for the sake of clarity we will discuss them independently.”

USAGOLD note: One of the gold market’s fascinations is its complexity – something Nieuwenhuijs tackles in this big-picture overview.

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