Gold Coin Savings – Gold Bullion Market

Jun 12

The gold bullion market deals with the exclusive trading of gold. Gold is primarily traded on the over-the-counter market. Gold bullion refers to a gold coin that is made for investment, rather than currency. In addition, bullion coins are usually minted after 1800 and are available in various weights.  The largest markets are in London, New York, Zurich and Tokyo. (The current gold bullion coin in the United States is the Gold Eagle.) The gold bullion market moves by spot prices and interest rate differentials, rather than supply and demand, which usually drives commodity markets.

There a few important terms when it comes to the gold bullion market. There are allocated accounts, which is when a dealer maintains a client’s account. The client’s account is made up of identifiable bars, plates, etc. This is to make sure that a client’s funds are his exclusively and will not be mixed up in other accounts.

The most common way of trading on the gold bullion market is through unallocated accounts. (These accounts can also be made of silver, platinum and palladium.) Unallocated accounts allow for crediting and debiting from respective accounts and the balances are backed by the metal dealer.

There are several reasons why an investor would seek to become a part of the gold bullion market. An important reason is that gold does not suffer like paper currency does in times of economic downturn. Inflation, debt, social unrest among other things, leave gold as an incredibly solid investment.

Gold can also be traded on a variety of markets and is easily liquefiable. Investing in gold protects an individual’s investments in a way that mere stock cannot. For an individual looking to diversify their portfolio and protect their investments in this weak economy, the gold bullion market is worth considering.



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