New York Gold Market
The gold market in New York is a highly-active center of gold trading that shrank significantly in recent decades but is still robust and important in today’s global economy. The New York gold market’s greatest peak occurred in 1979 and 1980 when gold prices reached a high of $850 per ounce and remained at such price until January 21st, 1980. New York City was then and still is, the major center of business in the gold market.
Previously, until 1971, the New York gold market and all of the American gold investment markets largely followed the gold price system set by the United States and the London Gold Market. This meant that the value of the American dollar and the price of gold remained linked to one another. After the collapse of the Bretton Woods financial system in 1971, the gold market in New York, as did all of the gold markets around the world, began to trade based on supply and demand from traders and market makers in the open bullion markets.
The New York gold market is home to a high-volume exchange of gold that involves many gold portfolios, bank gold accounts, and other financial institutions. Large banking firms and their derivatives are the main players in this market. Located in the New York City borough of Manhattan, the New York gold market trades gold futures, using immense amounts of leverage and is, therefore, attractive to all levels of traders, including those not typically found on the more traditional commodity exchanges.
Today, the main exchange that contributes to the New York gold market is the COMEX, also known as the New York Mercantile Exchange (NYMEX). The COMEX gold futures, which began trading in 1975, are now the most actively traded gold contract in the world. Trades are conducted on an electronic system with a minimum of one-hundredth of an ounce (a troy ounce is the measurement unit used) of gold as the trading unit. The COMEX gold futures contract typically trades during US or foreign currency trading hours in every major market from New York to Tokyo and Hong Kong.
The primary purpose of the New York gold market is for principal trading activities. For example, gold miners, banks, and other financial institutions buy and sell gold in order to take advantage of price changes (up or down). The variations in gold prices are often many times greater than those of foreign currencies, so the potential for profit is much higher. The New York gold market also allows major banks throughout the world to hedge their gold holdings. These hedging techniques are used to reduce the risk of a negative price movement by locking in a certain sale price.
In addition to trading gold in the New York gold market, investors can buy and sell coins, bullion, and physical gold. Gold coins and bullion pieces are very popular with investors because they are easier to store, transport, and buy and sell than more complex forms of gold. Physical gold includes bars and ingots, as well as scrap gold, jewelry, and old coins. Gold coins and bullion can be made from a variety of metals such as gold, silver, platinum, palladium, and other precious metals.
The New York gold market has experienced ups and downs since its peak high in 1980, but the market remains strong and serves an important purpose in the global economy. It provides investors with an excellent way to make a profit on their investments, as well as offering a secure form of savings. The New York gold market provides great opportunities for those of any level of investing and traders, with its high liquidity and wide range of products.
