The Gold Market – How It Works

Image of gold bars and a stock symbol going upward on a graph.

Share This Post

Gold is a precious metal that has been used as a currency and a store of value for thousands of years. Today, gold is still highly valued, both for its intrinsic beauty and its investment potential. In this article, we’ll explore the gold market and how gold prices are determined.

Supply and Demand

Like any commodity, the price of gold is determined by supply and demand. The supply of gold comes from mining companies, governments, and individuals who sell gold. The demand for gold comes from jewelry makers, investors, and central banks.

Central banks are major players in the gold market. They hold significant amounts of gold as a reserve asset, and their buying and selling activity can impact the price of gold.

Did you know Westlake has a spot checker tool, right on our website? Click here to view it.

Economic Indicators

The price of gold is also influenced by economic indicators such as interest rates, inflation, and the strength of the US dollar. When interest rates are low, investors may turn to gold as a safe haven investment. When inflation is high, the price of gold may rise as investors look for a hedge against inflation. And when the US dollar is weak, the price of gold may rise as investors seek an alternative currency.

Trading

Gold is traded on various markets around the world. These include the New York Mercantile Exchange (NYMEX), the Tokyo Commodity Exchange (TOCOM), and the London Bullion Market Association (LBMA). The LBMA is the world’s largest gold market, and its prices are widely used as a benchmark for gold prices around the world.

Futures contracts and options are common ways to trade gold. A futures contract is an agreement to buy or sell gold at a predetermined price and date in the future. Options give the holder the right, but not the obligation, to buy or sell gold at a predetermined price and date in the future.

Price Fluctuations

The price of gold can fluctuate significantly in response to market conditions. For example, the price of gold may rise during times of political uncertainty or economic instability. On the other hand, the price of gold may fall when the economy is strong and investors are more willing to take risks.

Want to know how much your gold is worth? Contact Westlake Gold today for a free consultation.

The gold market is a complex system that is influenced by a variety of factors, including supply and demand, economic indicators, and trading activity. Understanding how gold prices are determined can help investors make informed decisions about buying and selling gold. While there is no guarantee that the price of gold will rise in the future, gold has historically been a safe haven investment that has held its value over the long term.

More To Explore

Image of silver bullion in a pile. Silver investment.
Silver

Unlocking the Value of Silver

Silver has long been cherished for its lustrous beauty and utility, but beyond its aesthetic appeal, this precious metal holds significant value in various industries

Lynne A.

left us a 5 star review

yelp

Met with Joel to see if the silver and gold coins I found were worth anything. He was very nice and only one coin was worth a few bucks. He suggested just...

Lynne A. September 29, 2023
yelp

Joel took time and patiently explained the value of my jewelry and how he calculated it. I believe I got a good, honest deal and I would highly recommend him.

Anne Andrews C. September 28, 2023
google

I could not have been more pleased and satisfied with Joel at Westlake Gold. If you have spare jewelry and gold that you want to get top dollar for, this is the only place that you need to go. Do not go to downtown LA. Do not go to any jewelry store and especially do not go to a pawn shop! Joel is the only man that you need to see. He is professional, kind, and as sincere and honest as they come. He has a low overhead for his business and he is without question going to give you the best possible price for your valuables. I didn’t even know that some pieces that I had were worth more than I had expected… but Joel being as honest and sincere as they come made sure that I had what I needed and did with a gracious understanding and very friendly demeanor. After leaving this place, I was both impressed and so happy to see that there are still people out there that do care about others. Do not waste your time and go anywhere else… this is the man to see!!!

Steve Benezra September 20, 2023
google

Very professional and detailed in their evaluation. I felt very comfortable.

Ali Farboud August 9, 2023
google

The team at Westlake Gold was both kind and professional. Joel is very knowledgeable and fair - and I really enjoyed working with him on the sale of some estate jewelry. I highly recommend!

Dana Barrett July 10, 2023
google

*Respectful, surprisingly great appraisal, very safe and honest.* Joel meets his customers in a clean and neat office inside of an office building, instead of many others in the area. This allows me to feel more comfortable to start with. He was very respectful, friendly, and courteous. The best part comes with the pricing. This was not my first time releasing old gold and jewelry, and I received way more than I thought I would have given my past experience with other jewelry buyers. Thank you, Joel. Wish I had met you in the past, but sure am happy I do now.

Birgitte Tan June 30, 2023
yelp

I was very happy with the transaction and the money that he offered to us when I sold gold jewelry. He was very knowledgeable and kind to me and my...

Mithila U. June 2, 2023
google

Great experience selling gold silver and jewelry. Joel is very skilled and explains the transaction.

Mike Kale May 19, 2023
google

What a hidden treasure, pun intended. Overwhelmed with a large collection that I wasn't sure was costume or the real deal. impressed with how each piece was tested even the ones marked for authentication. professional and honest.

janie ahlberg May 14, 2023
google

If you are looking for an honest appraisal and fair deal, this is the place to go! I walked in with what I thought was seven 1oz Canadian silver dollars worth $25 each, turns out they were 1oz Canadian platinum coins with worth $1,000+ each!! He operated with 100% integrity and patience with me. He took the time to educate me on coins. I will defiantly return!

John Strote May 12, 2023
google

Highly recommend Westlake Gold. I had a bunch of estate jewelry to liquidate and I feel like I got a very fair price for my items. I definitely will return. Thank you!

Rana Mohr May 12, 2023
google

I highly recommend Westlake Gold - Joel is very knowledgable about gold and diamonds and I loved his authenticity when giving me the information I needed. He’s very professional, and courteous. I’ll definitely be back in future!

hannah de boisblanc December 16, 2022
google

Joel, thank you for your help with the silver we brought into your shop. You were very helpful and pleasant to work with.

Robin Johnson December 5, 2022
google

Just met with Joel while taking care of selling my father's gold (after his passing). Joel was honest, fair, and professional. Highly recommend Westlake Gold.

Cathy Anderson August 2, 2022
google

I highly recommend Westlake Village Gold! I took my Jewelry to several places,I receive the best price from Joel his customer service, Attention extremely detail. I knew the first few minutes of meeting him that you can trust this man, Definitely will be back.

Rebecca de la Torre September 14, 2020
google

Joel always provide incredible customer service. Joel is very knowledgeable about gold and diamonds and is also very polite and I always enjoy my conversations with him when trying to sell him gold. I highly recommend working with Westlake Gold.

Patrick rohn September 10, 2020
google

I bought two rings from Joel and was blown away by the experience. He is extremely honest, professional, and knowledgeable. He normally doesn't make jewelry sales to walk in customers, but just so happened to have exactly what we were looking for. And he even arranged to have our rings resized and polished. They are beautiful and exactly what we wanted.

Stephanie Bland March 30, 2020
google

Very professional, knowledgeable and honest. More than fair, highly recommend.

Doug Weil January 9, 2020
google

Joel is great at what he does. He helped me with valuing some coins I needed. If you need to find the value on any jewelry you must go here. Thank you so much for your help!

Probate Services Inc. November 2, 2017
google

Joel was extremely knowledgable, professional, informative and expeditious in the overall process. I will be coming back if/when I have a need to sell silver, gold and/or jewelry!

Scott O'Malley July 14, 2016