Silver London Fix (SI-099)
Silver has long been sort after as a precious metal for jewellery and ornaments, and before the advent of paper money, silver was used as currency by many civilizations who would cast the metal into coins. The price of the silver used in the coins would represent their value which in turn could be traded for a variety of commodities. Silver is no longer used in our coinage and in today’s financial markets all silver trades are made against the US Dollar. Continuing demand for the metal in traditional crafts and modern industry makes silver an attractive commodity to trade in, and its relatively low value and stable price make it accessible to small traders.
The London Metal Exchange (LME) is the futures exchange with the world’s largest market in options and futures contracts on base and other metals.
For centuries, gold has been looked at mainly as a commodity, but it is also considered the only real international currency. When purchasing gold or silver you need to know what affects the price both up & down. It’s important to understand what kind of trade you’re making. Gold & silver, like all commodities, are subject to daily price fluctuations.
One of the first questions asked when considering purchasing precious metals is who controls the price? This question is often asked because gold is presented as being a stable & solid trade in a sudden economic downturn. Despite its wide appeal, gold and silver operates on an open market & adheres to the supply and demand of the countries & companies that produce it.
Historically, gold is produced in limited quantities. Economists & institutions use various formulas to determine the value of gold in order to calculate the possible future market price. Gold and silver is measured typically by the ounce and will fluctuate depending upon multiple economic factors such as interest rates.
Since 1919, the way of setting the daily price of gold & silver has been to use the London spot. London’s spot fixing is done by a telephone meeting between several different representatives from trading banks that are involved in the London precious metals bullion market. Gold’s spot fix is always quoted in U.S. dollars, Euros or British pound sterling. The firms that make the decisions on metals market pricing include Barclays, Scotia-Mocatta and Deutsche Bank.
The London metals market is comprised of a variety of international trading firms and is owned by the Bank of England. London is by far the largest metals trading market operating in cities like New York City & Hong Kong. Market evaluations are continually needed to determine the various types of trends that may affect the daily spot price. This directly impacts the daily market fixed price for precious metals.
Traders will study historical charts to see if there are any market trends that can be taken into consideration when attempting to determine the future price of gold & silver. Market averages are often used when analyzing the future prices in a certain market. The web offers unlimited historical data in the form of graphs & charts to assist traders in determining whether they should acquire metals in their portfolios.
There are many factors that contribute to the daily fixed market price for gold & silver. They include stability of the US dollar, geo-political events, international finance rates, physical demand, and mining costs. There are certainly many other contributing factors that do affect metals prices, the main one being the amount of gold and silver available to the open market at any given time.
Silver trading is often chosen by traders who want an inexpensive way to diversify their portfolio with a low risk commodity, and it can be used to hedge less stable currency trades.