There are three main types of gold prices internationally: market prices, production prices and quasi-official prices.

All other gold prices are derived from this.

1. Market price Market price includes spot and futures prices.

These two prices are both related and different.

Both prices are restricted and interfered by various factors such as supply and demand, and vary greatly, and the price determination mechanism is very complex.

Generally speaking, spot prices and futures prices are affected by similar factors, so the direction and magnitude of their changes are basically the same.

However, due to the convergence of market trends, gold's basis (that is, the difference between gold's spot price and futures price) will continue to decrease as the futures delivery period approaches. By the delivery period, the futures price and the spot price of the transaction are roughly equal.

In theory, futures prices should steadily reflect spot prices plus carrying costs for a specific delivery period.

Therefore, the futures price of gold should be higher than the spot price, the forward futures price should be higher than the futures price, and the basis difference is negative.

However, the factors that determine spot prices and futures prices are complex, such as: the near-term and long-term supply of gold, including the size of annual gold production, the selling off of gold reserves by central banks, etc.; the market demand for gold, which also includes the actual demand for gold.

Changes in (jewellery industry, industry, etc.), gold recycling and reuse, etc.; the stability of the political situation in the world and various countries, the level of inflation rates, expected annual interest rates, and some emergencies are all major factors that affect investor psychology, and then

Affects the trend of gold prices; speculators take advantage of gold price fluctuations and emergencies to create hype, and various hedge funds enter the market to stir up trouble, artificially creating the illusion of supply and demand.

All of this may unbalance the supply and demand of gold in the world gold market and distort the relationship between spot and futures prices. At this time, because the supply of gold exceeds demand, the cost of holding futures cannot be compensated, and the basis may even become positive.

, causing the spot price to be higher than the futures price, and the futures price to be higher than the forward futures price.

With the establishment of gold markets such as the Hong Kong Gold Market, the world's gold markets have become a continuous whole, with transactions continuing 24 hours a day.

Due to the various factors mentioned above, the price of gold in the world market often fluctuates dramatically.

Only the medium and long-term average price, which neutralizes various speculative factors, is a more objective reflection of the market price of gold affected by supply and demand.

For example: In the 45 gold auctions conducted by the International Monetary Fund between 1976 and 1980, the average price achieved was US$/ounce, which was very close to the average price of the London gold pricing market during the same period.

2. Production price Production price is based on the production cost to establish an obviously stable price basis fixed on the market price.

At the current exchange rate, the average total cost of gold mining is slightly less than US$260 per ounce (in 1986, the cost of gold production in South Africa was approximately US$258 per ounce).

In fact, with the advancement of technology, the costs of prospecting, mining, refining, etc. have been decreasing, and the cost of gold mining has been on a downward trend.

Statistics from the World Gold Council show that the world adds about 2,600 tons of gold every year, and the annual demand for gold is 300 to 500 tons greater than the amount of gold mined.

However, due to the large-scale gold selling behavior of central banks in various countries since 1996, the price of gold in the international market has dropped from a high of 418 US dollars per ounce, and even dropped to US dollars per ounce, which is lower than the production cost of gold in a certain period, causing major gold prices to fall.

Producing countries suffer huge losses.

3. Quasi-official price This is a price used by the central bank for official gold-related activities.

In the quasi-official price, it is divided into mortgage price and accounting price.

The total official reserves of central banks around the world (central banks of various countries are often the largest holders of gold in each country) were approximately 34,000 tons in 1998.

Calculated by production capacity, this is equivalent to 13 years of world gold mine production and accounts for 137,400 tons of the entire mined gold stock. This is an important reason for determining the quasi-official gold price.

1. Mortgage price.

This was created in 1974 when Italy used its own gold as collateral to borrow money from the Federal Republic of Germany.

The determination of the mortgage price is of great significance in the history of modern gold.

On the one hand, it complies with the International Monetary Fund's requirement that each ounce of gold is equal to 35 Special Drawing Rights, and on the other hand, it meets the needs of central banks holding gold not to freeze gold.

In fact, this price is a combination of the United States’ request not to “remonetize” gold and Europe’s cautious demand for gold’s “demonetization.”

When borrowing, gold is used as collateral, and the gold is priced according to the market price, and then a discount is given. The gold price is preserved to a certain extent because there is a large amount of gold being pledged.

If the price of gold falls, the interest over the borrowing period will have to be higher than the expected annualized LIBOR rate.

2. Accounting price.

It was proposed after the disintegration of the Bretton Woods system in August 1971.

Due to the strong attraction of market prices, when there is a huge gap between the market price and the official price, countries have increased their respective gold official prices due to the need to price their official gold reserves. This has resulted in the establishment of official gold reserves.

The quasi-official accounting price.