If you have plans to buy, sell, or trade gold or silver, it’s safe to assume you’ll want to have a better understanding of the bullion market. There are, in fact, many bullion markets. However, the London Bullion Market is considered the leading global platform for trading solid precious metals, which are primarily in the form of gold or silver. The precious metals experts from First National Bullion, the gold dealers San Diego collectors trust for high-quality service and industry knowledge, suggest you take a moment to learn more about the bullion market as you explore your trading and investment options. 

How the Bullion Market Works

The purpose of any bullion market is to allow for multiple trading options via a platform where values are clearly stated and determined mainly by supply and demand —although other factors can also affect the market. The markets are used to show current going rates in real time. You’re free to make investment, purchase, or trade decisions based on what’s right for your personal situation at any given time.

Each market has its own guidelines. For instance, the London Bullion Market is based on London Bullion Market Association standards and operates 24 hours a day. It allows for gold/silver transactions at market spot prices. Trading of forwards and options on these metals is also possible via this market and similar ones. Member companies usually earn the most revenue from their gold and silver bullion.

Factors that Affect the Bullion Market

Bullion markets, in general, are considered over-the-counter markets. Supply and demand play a big role in the prices you’ll see listed through any bullion market platform. Additional factors that influence listed gold and silver prices include:

• Monetary policy and/or Federal Reserve commentary related to gold/silver
• Inflation and other economic factors
• Currency movements
• Overall confidence in gold/silver

How Bullion Is Traded

Physical bullion can be traded. However, it normally allows for less trading flexibility over other forms of gold and silver investments. This is because it’s a clearly tangible item in established sizes, typically in the form of bars and coins. It’s still possible to trade this way if you’re careful with your selection of bullion. Exchange-traded funds (ETFs) and mutual funds are among the other ways you can buy and sell gold and silver. It should be noted that other precious metals in solid form can be traded as well, including platinum and palladium.

Bullion Market Quirks

How much you benefit from the bullion market will depend on what type of bullion you prefer to trade, buy, or sell, how much you plan to invest, and your overall goals with bullion. As far as market quirks go, gold tends to be stable and not influenced excessively by supply and demand. It’s also a physical commodity that’s often hoarded, which means prices are also influenced by sellers and when they prefer to put some of their stash on the market. However, silver tends to be more volatile than gold in terms of market performance. 

For information on any aspect of buying, selling, and owning precious metals, call on the experts at First National Bullion and Coin. If you’re looking to buy San Diego gold and bullion, you can trust our reputable dealers. We’re a boutique precious metals firm with experienced professionals, and we work hard to keep our investors informed with the most up-to-date market news. If you’re looking to add precious metals to your portfolio, call us today at 858-666-6570.

The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.