Gold and silver price fixing is a decades old method of establishing a
beginning price for these precious metals. Unfortunately, the term "price
fixing" now carries an unsavory connotation. In the USA and some other
countries "price fixing" is an illegal act.
Gold and silver price fixing is accomplished by a (once or twice) daily
conference call involving the participation of just a few international banks.
Four banks set the gold price, and three set the silver price.
The 'fix" price becomes the benchmark, and as soon as trading begins the
actual trade prices will change within seconds.
Price fixing, as I said, is determined by a decades old mechanism, supposedly
based on asking price and offer price quotes from the previous day. Being
decades old, the method currently used predates computers and electronic
This "manual" method is being widely criticized as being
non-transparent and open to manipulation. Mining companies, bullion traders, and
regulators are pressing for a modern, transparent mechanism for establishing the
daily starting prices.
It is reported that the "World
Gold Council has called for a new way to determine the daily price of the
yellow metal, decrying the current price-setting method, which dates back to
1919, as outdated and in need of reform".
Pressure from the mining companies, bullion traders, and regulators may be a
part of the World Gold Council's desire to update their practices, but lawsuits
and regulatory fines against member banks the real impetus must surely be the
driving force now.
Bullion traders may never take physical delivery of the precious metals
they buy and sell, much like other commodities.
However precious metals dealers do take delivery, usually in the form
of bars and rounds (coins), which they sell to individuals. Gold and
silver prices have a direct impact on these individual investors. This is
the market that demands pretty "mint condition" bars and coins.
Gold and silver prices have a direct impact on the jewelry and other
industries as well. In the case of the jewelry industry, they usually buy
gold and silver sheets, wire, and casting grains from companies that
produce alloys. For example, many mounting manufacturers and jewelers will
buy casting grains in 18 karat gold, 14 karat gold, or sterling silver.
Gold and silver price fixing through a new and more transparent
mechanism will not have much of an influence on actual trading prices. It
must, however, restore confidence that the market is fair to all parties.
Top - Gold bullion in the form of bar and coins
Next - Silver bullion bars
Next - Barclays headquarters, London
Gold casting grains, 14 karat
Next: - Gem special offer - Ruby - This marquise shape
gem is lively and exhibits great color
Next - Mozambique ruby rough - ungraded
Last - Dealer Program Image - Pink Spinel and Sterling
A Google search for links or images using keywords such as gold
fix price can return some very interesting information and websites.
We keep gem prices low by buying quality gemstone rough
worldwide, and having the rough material cut by our gem cutters in Asia.
Gem Industry News
Mozambique Ruby Rough
Gemfields, a leading gemstone mining company held its first auction of
ruby rough from its Mozambique holdings earlier this month in Singapore.
Gemfields offered 62 lots of ruby and corundum rough. The lots ranged
from high quality to low quality. A total of 55 Of the total lots offered,
companies participated as potential buyers. 57 were sold, representing
Some of the lower quality ruby lots were treated, while other lots were
left untreated. The enhanced sale prices for treated lots proved the
treatment to be worthwhile.
The auction generated $33.5 million. The average carat price for all
grades of ruby and corundum rough was $18.43.
I saw an article in a jewelry industry newsletter
that focuses on the importance of keeping your customers. The article made the
point that you can reduce expenses by selling (again) to those you have done
business with before.
A snippet from the article bears repeating...
"Keeping your best customers loyal to
your store can be a cost-effective way to increase business when compared with
the expense and effort of attracting new customers, said Kirsten Darrow,
marketing director of Fred Meyer Jewelers."
The point is just as valid for dealers that do not operate a
In economic hard times your customers still want to give their loved one a
gift or two that are personal. They depend on you to provide good value and
low prices. When the economy picks up, they should return to you to buy more
and better pieces.
Be The Quality Jewelry Discounter.
Do you enjoy jewelry and gems?
Do you enjoy talking with friends and friends