Gold Exchange Rates Posted by James Randolph on January 11, 2010
Gold Exchange Rates
Investors in the United States typically think of gold in terms of dollars. The gold exchange rate with the dollar at the January 8, 2010 pm London Gold Fixing was $1,126.75 to one ounce of gold. The COMEX division of the New York Mercantile Exchange’s spot price for January gold at day’s end on January 8 was $1138.28 for an ounce of gold.
The difference in the two gold exchange rates is that the London Gold Fixing is a twice daily setting of the current price of gold on the London Gold Exchange. A spot price on the COMEX market is the current value of gold per ounce on a futures contract. Because the United States jobs report showed a loss in non-farm payroll, investors believe that the Federal Reserve will not be able to raise interest rates, which historically tends to raise the value of the dollar. Thus investors in gold futures contracts are expecting that gold will go higher versus the dollar due to United States’ economic woes.
Gold does not just trade against the dollar. Gold can be purchased with virtually any currency. The London Gold Fixing is posted with the gold exchange rate for Pound Sterling, Dollars, and Euros. In many ways gold can be considered a currency, subject to the same pressures and opportunities as all world currencies. The difference between gold as a currency and all others is when there is economic chaos, persistent inflation, political unrest, and war, investors sell all currencies and buy gold.
Senior Staff Writer – Certified Gold Exchange