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Find out how the gold exchange works and stay up to date with BMG. • 0 Article
A gold exchange is a platform/market where interested actors can trade gold or related products. The gold exchange includes products in various forms, for example, it can be bars, coins, etc. In addition, future exchange contracts such as gold futures and shares of gold mining companies are available on this platform. Accordingly, the main components of the gold exchange are formed as follows:
Cash market - physical gold is bought and sold immediately on demand;
Futures Market - Traders buy and sell contracts to hedge the future supply and price of gold;
Gold-related securities - include exchange-traded funds that track shares of gold and gold-mining companies.
The primary goal of the Gold Exchange is to create a centralized and regulated space for transactions, which ensures the market's transparency, security, and liquidity.
Typically, gold exchanges have members or participants who are authorized to trade. Participating actors may be financial institutions, brokerage firms, individual investors, and others. In turn, the gold exchange provides a platform where participants can buy and sell gold. Similar physical or electronic spaces operate according to established rules and regulations, ensuring compliance with the principles of fair trade.
Buying and selling gold contributes to the price determination process because the value is determined according to demand and supply. It is on this system that the international gold exchange is based, and therefore the price is constantly updated.
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