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How Is The Price of Gold Determined

How Is The Price of Gold Determined

The following article is created and or curated by the Orion Metal Exchange for the benefit of our followers.  We seek to provide relevant precious metals, economic and geopolitical content that can impact your retirement and savings. If you are interested in learning about precious metals investing, call 1-800-559-0088, for a FREE investor kit.

Gold can truly be considered an all-weather investment, especially when you consider the reputational risks associated with banking, stocks and other forms of investments. While there are a number of arguments both against and for investment in gold, we want to direct your focus toward the prices of gold.

Questions like, “what affects gold pricing?” and “who sets the price?” are often overlooked and very few people know about what happens behind the scenes. So, if you want to learn more, keep reading!

Who Decides Gold Prices?

For centuries, gold prices have been decided by the paper gold market and not the physical gold market. These days an electronic auction system is set in place to set the price. This means that currently, the London OTC gold market and the US Commodity Exchange (COMEX) set the international prices. These prices are independent of the supply and demand ratio and once the price is set, physical gold markets adopt it.

The adjustments and changes in the prices are made in real-time, and once the financial evaluation of buy-and-sell auctions is conducted, the price is decided based on the buy-and-sell disparity of 20,000 troy ounces, at most.

The price is then published in US dollars, Euro and Pound Sterling. If the difference of buying and selling volumes is above 20,000 ounces, the auction starts again, and a new price is fixed.

External Factors and Gold Prices

Outside of the London Bullion Market Association (LBMA) pricing strategy, there are a few external factors that can influence the pricing.

Supply and Demand

For any commodity, supply and demand are major contributors of prices. This applies to gold as well, which when in high demand and low supply, becomes costlier, and vice versa. Since gold is a rare precious metal, analysts believe that at one-point gold production will decline and prices will surge dramatically, because the demand among investors, banks and various other sectors remain strong.

Political and Social Conditions

Markets are heavily affected by regional conflicts, economic conditions, social reforms and political movements. Any of these factors can influence gold prices; Brexit and the US-China trade war are recent examples.

Currency Devaluation

When a currency loses its purchasing power, the prices of gold can increase. Prices are also affected when one country’s currency depreciates compared to one or many other foreign currencies. This is why gold is considered to be a sound investment for your portfolio since it can maintain its price when every other investment in the market is being devalued.

Take the Next Step with Orion Metal Exchange

Now that you’re more aware of the prices and its influencing factors, get in touch with us to invest in gold coins or bars. We offer a comprehensive investment solution coupled with information on procurement, liquidation and happenings in financial markets.

Our services also help you secure your gold and silver investments by offering secure vaults, home storage options and retirement accounts. We’re one of the leading gold investment dealers in the United States and can facilitate you throughout the process.

For questions and further information, feel free to contact us at 1-800-559-0088 or send an email at

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