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October 2021

Business

Who sets the Gold Price?

Gold is a commodity that is subject to the same principles the world over. An ounce of gold is an ounce of gold and the gold spot price is the same everywhere.  However, a lot of people lack the understanding of what the gold spot price is and how it is used.  There is a popular misconception that when you buy gold, the spot price is the price of the physical trade of actual physical gold bullion. That is not the case.

What is the gold Spot Price?

On Average, over $200 billion worth of gold transactions take place on a daily basis. Of that, 76% of the physical gold trades happen on the London Bullion Market, which is an Over-the-counter Market. Over the counter traders are often affiliated with the London -Bullion – Market – Association (LBMA). Each day the LBMA sets a price based on the prices of gold futures. These are contracts for delivery of physical gold at some future date. As trade moves from London to New York, the “fixed” London price is adjusted to trade on COMEX, which is part of the New York Mercantile Exchange. Most trades are done electronically and don’t require immediate delivery of the gold so future trades play a big role in determining up-to-date prices.  This means that the spot price is calculated on an electronic or paper market that is independent of the actual physical supply of gold. So when you are selling your gold coins or gold jewellery to gold dealers, the price you get for it will be based on the same electronic market.  The gold price of what you have to sell is affected by the futures market that lies outside of the normal supply and demand issues.

Why is the gold price handled out of London?

This has something to do with the President Roosevelt’s outlawing the ownership of physical gold by private Citizens in 1933. American Citizens were required to turn their gold in for dollars. This forced trade out of the country and London became the centre of physical gold trades. However, when the laws were changed back in the 70s, allowing Americans to buy and hold gold again, the gold trade was already firmly entrenched in the LBMA.

When you are selling or buying gold, you are doing so at a price that is affected by future markets that have nothing to do with the supply and demand of gold. This is because futures can be settled with cash instead of actual physical gold. The spot price that gold dealers use represents an expectation of the future value of gold and not the actual price of physical gold at that very moment.  The gold price, therefore, does not necessarily fluctuate in response to supply and demand, but on the expectation of what the future price will be.  When you begin to understand that the price of gold fluctuates by the second on any ordinary day, you will see that there is an opportunity to make money as there is with any commodity.  Trader and speculator activity can cause the market to swing considerably.  As with other commodities, speculators are influenced by news events and various factors like politics, wars, etc. Gold investors look at intermediate and long-term factors. For instance, an increase in the industrial use of gold pushes the demand up but when you consider the increasing cost per ounce of gold affected by the discovery, recovery and refining of gold then you can see how the price is pressured to go up.

To gain some perspective of how much your gold is worth today or will be in the future, it pays to know and understand the factors that affect the setting of the gold spot price.  When you decide to sell your gold, you might want to keep an eye on the trends that affect the price. You will notice that gold fluctuates a great deal. You may want to hold on to the gold if you believe that the long-term trends will remain bullish for a while.

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Business

HOW TO PREPARE A LTL SHIPMENT?

Less than Truckload or LTL Shipping is the type of shipping that is used for transporting consignments that weigh between 150 to 30,000 pounds. In this shipping method, the entire trailer is not rented for shipping the goods. However, one only pays for the space that is occupied by their consignment. The other shippers can make use of the unoccupied space. It is one of the cost-efficient ways to transport goods. Each type of shipping needs its own set of preparations before it can be shipped off. Here is how you can prepare for the shipment.

Preparation

Dimensions of the package

Before the parcel is shipped, it needs to be measured properly. The dimensions of the parcel are what will help to determine the rate of shipping along with the trailer which would be the perfect fit for transporting it. The dimensions of the parcel should include height, width and length. The accurate dimensions of the items being shipped need to be shared as it helps the shipping company to maximize their capacity. However, when you do share inaccurate measurements, you put yourself at the risk of paying the adjustment fee before the consignment can be shipped.

Necessary documentation

For the LTL shipping to go ahead all necessary documentation needs to be completed with the correct information. This documentation has to be shared with the carriers when they arrive to pick up the package. The document referred to as the bill of lading works is required. This works as the receipt when the goods are being shipped.

Loading the goods

The last step of preparation is loading the shipping goods into the pallets. This step helps to condensed them which helps to make the best use of the shape. When goods are loaded on the pallets it increases their protection against damage. While loading the goods, the heavier items are usually placed at the bottom of the pallets or the crates. The lighter ones are placed on top of it. Once the items have been placed a label is placed on the side.

Shipping Charges

Whenever you are planning to ship a parcel, the shipping costs play a crucial role. There are several determining factors when it comes to calculating shipping costs for LTL:

Location: The cost of the shipping is dependent on the distance the shipment has to travel. The longer distance the more shipping it will cost you.

Weight and Dimensions of the cargo: After a distance, the weight and the dimensions of the consignment also help to determine which class of freight does it belong to. The shipping rates are dependent on the freight class.

Mode of shipment: If you are looking for expedited shipping for your products, then the service might charge you a bit more than regular LTL shipping.

Type of products being shipped: Some of the cargo requires special handling or equipment while being transported. The type of product which is being shipped plays a determining role in the calculation of LTL shipment charges.

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