Gold Prices

(redirected from Gold as an investment)
Also found in: Financial, Wikipedia.

Gold Prices


commodity prices expressed in gold.

Under the conditions of gold circulation, with free circulation of gold coins and with bank notes redeemable in gold, prices expressed in national monetary units corresponded to gold prices. Under the gold bullion standard and the gold foreign exchange standard, there was no substantial gap between prices in national currency and gold prices. However, with the liquidation of the gold standard, the introduction in capitalist countries of paper money circulation with a nominal gold content in foreign currencies, the increasingly frequent devaluations, and the formation of a free gold market, commodity prices in national monetary units ceased to correspond to gold prices. This discrepancy can be explained by the differences in commodity price fluctuations and the market prices of gold, differences especially apparent at the time of devaluation and revaluation of currencies. For example, after the devaluation of the pound sterling in 1967, commodity prices in Great Britain slowly increased and gold prices sharply declined. Under present conditions, gold prices in any country can be determined through the actual commodity prices in the national currency and the market price of gold in the given currency. In domestic commodity turnover, however, the gold prices have no practical importance. In international trade there are instances of contracts in which commodity prices are fixed in gold monetary units and payment is made in the national currency on the basis of its actual gold price (the so-called gold clause).


References in periodicals archive ?
Presenting details of the report at a specially convened conference organized by GFMS and The Silver Institute in Toronto, Albert Cheng, the World Gold Council's Head of Retail Investment said that too often in recent years people had been led to conclude there had been little interest in gold as an investment medium.
Compared with an exceptionally strong year in 1999 because of Y2K concerns, the demand for gold as an investment was lower.