Three ways the world is trading gold
First is real gold trading - meaning buyers and sellers actually exchange gold with each other, usually in the form of columns or standardized pieces. One typical place is the London gold market, where global gold reference prices form. Here, buying and selling is done between large organizations such as banks or financial companies. They traded "standard" gold bars - usually weighing about 12kg, with high purity - and stored in a warehouse.
This market is regulated by the London Gold Market Association (LBMA). They set technical standards and monitor transaction ethics. London gold prices are closed twice a day and are being monitored by the whole world. Although there is no physical man, this network is considered the heart of the global gold market.
Second is gold trading through accounts - where investors do not really hold gold but only buy and sell the "equity" of that gold, similar to how people invest in foreign currency or stocks. This model is popular in financial centers such as Singapore, Switzerland, Hong Kong (China). Transactions are mainly via electronic platforms. Players need to deposit a deposit - called a deposit - to buy more gold than the amount they have. Therefore, this model is often managed very closely.
According to the World Gold Council report, many countries set leverage limits (ie not lending too much) and require clear disclosure of risks. In Singapore, only licensed financial institutions are allowed to deploy the service, while people are advised to be cautious.
Third is derivatives gold trading - a more in-depth form of finance. Here, investors do not buy gold, but bet on gold prices to increase or decrease in the future through contracts. The most famous exchange is COMEX (New York), under CME Group - where oil, wheat, coffee, etc. are also traded. Transactions at COMEX are conducted via computers, automatic order matching. Although contracts allow real delivery of gold when maturing, most investors pay positions early to take profits - meaning no one really needs to "take gold home". The exchange has a warehouse system, a deposit mechanism and is regulated by the US Commodity Exchange (CSTC).
In Asia, a similar model exists. The Shanghai Gold Exchange (SGE) is the largest gold exchange in China, traded in yuan and closely controlled by the central bank. In addition to real gold trading, SGE also has financial instruments similar to COMEX. SGE's valuation system is used as a reference in the region, contributing to the competition affecting the Western market.
Conditions for operating and monitoring the international gold market
Despite the different models, the common point between major gold markets is the requirement for a strong legal foundation, advanced technical systems and independent monitoring mechanisms. For example, the London market operates unconcentratedly, but is very strictly regulated in terms of product standards and transaction ethics by the LBMA. Meanwhile, COMEX - with a centralized exchange structure - must ensure the requirements for deposit, clearing and supervision of CFTC.
Many markets apply the OECD's rules on the legal origin of gold. That is, gold trading must be transparent about its origin, not involved in smuggling or conflict areas. This increases the prestige of the market and protects investors.
Finally, to participate in these exchanges, organizations must have strong financial capacity, transaction transparency and strictly comply with regulations. Some platforms, such as LBMA, also require member organizations to be sponsored by former members - as if considering " lich su" very carefully before granting trading rights.
