Gold And Bullion Info

Use of gold for monetary transaction can be dated back up to 3000 years. Gold as an institutionalized form of transaction was accepted after the end of Second World War. Bretton Wood conference, in the year 1944, fixed price of one ounce gold as 35 UD dollars. According to this conference, gold bullion price in different countries will vary according to their parity with US dollar. This system worked effectively till 1971. In this year, President Richard Nixon unilaterally suspended direct convertibility of gold and US dollar. After it, London gold fixing and intra day and spot price became the major indicators of global gold price.

London gold fixing is acting as a bench mark gold price from the year 1919. To derive daily gold price, two telephonic meetings are arranged daily among five major bullion trading countries of the world. Intra-day spot price is decided according to opening and closing value of bullion markets world wide. During the last decade, gold bullion price has witnessed several ups and downs. It crossed all previous yardsticks by superseding US$1,000 per ounce of gold benchmark in March 2008. However, the price started to decline after this spike and it became as low as $712.30 in November 2008. After it, the price started increasing slowly and steadily.

Studies have found that during inflation, gold bullion price accelerates significantly and challenges the hegemony of dollar in global financial market. From October 2009, bullion price is showing significant rise. However, some attribute this price rise to wild media speculation. Even some economists are equating this price rise as a bubble and predicting its burst in near future.

When you compare the trend of bullion price for last three centuries, you will find that price of gold was more or less stable over passage of time. Similarly, international financial analyst Jim Rogers is of the view that gold bullion prices will cross US$2000 per ounce one day. However, he has not cited any specific time frame with in which this price will be achieved. Transfer of several central bank deposits from US dollar to gold is also supporting further increase in bullion price.