If you’ve ever tried to sell gold coins or jewelry, you may be wondering how the gold buyer comes up with a price. Truthfully, It’s a complicated process. Gold has long been one of the main sources of money throughout the world, and many people have relied on gold in uncertain economic times. But what determines the price of gold in the first place? Should you buy it when times are tough? And how much could you actually look to gain if you want to sell gold coins?
How Gold Prices Work
The world has been using gold as currency for millennia, as far back as 550 BCE. Even now when it’s not common to carry gold with you to the market, we still hear the term “gold standard” in reference to our money. People often believe that gold is more tangible than paper money, which is why so many people turn to gold during times of economic stress. However, the price of gold changes much due to supply and demand. It can be incredibly time-consuming, expensive, and hard to mine gold, so it’s not that common to find it in circulation.
Today, gold prices are set by the ICE Benchmark Administration, or IBA. They use a process called the LBMA Gold Price, which comes from the London Bullion Market Association, the only bullion market accreditation accepted worldwide. Two times daily, the IBA publishes a new LBMA Gold Price in US dollars. This price allows investors, gold producers, and banks to have a benchmark to go off of.
How is Gold Priced?
So, we know that the LBMA Gold Price is used to determine the price, but how do they come up with that number in the first place? The main basis for the price is gold futures prices, which are contracts for the delivery of an amount of gold on a future date. This price is determined by the changes in supply and demand, cost of transportation and storage, and the spot price of gold, among other factors.
The LBMA Gold Price also takes the gold spot price into consideration. Typically, the gold futures prices are much more than the spot price, but if there is a large demand for physical gold, the spot price can exceed the futures price. Besides the LBMA pricing process, outside factors like market conditions, currency depreciation, and supply and demand can impact how much your gold will be worth.
What to Know Before You Sell
If you’re looking to sell gold coins, there are plenty of ways to do so. You can visit your local pawn or jewelry shop or turn to the internet on sources like eBay. With the uncertainty in today’s market, gold is likely to be in high demand, but this business can be incredibly risky as you just never know what will happen from day to day.
If you do choose to sell your gold coins or jewelry, make sure to have your collection professionally appraised first. Collectibles Investment Group can appraise your collection for free to give you an idea of how much it’s worth. Then, shop around at your local retailers to see who will give you the most money. Be sure you are dealing with a legitimate operation by asking for credentials and licenses, and always read the fine print in any sale contract you might sign.
No matter what you collect, from gold and silver coins to paper money to comic books, sports cards and more, Collectibles Investment Group is your destination for free collection appraisals. We can work with you to help you accurately and quickly determine the value of your collection so that you can get the most money possible. Contact us today to learn more and to schedule your appraisal.