How the London Gold Rate Determines the Price of Gold

Gold is the commodity of choice for many investors in today's financial climate. In many ways this can be seen as a backlash against all of the virtual bonds and contracts which caused the global economic crisis - unlike these imaginary creations gold is real, solid and tangible. One of the best indicators of the performance of gold on the world's exchanges is the London gold price, which is updated twice daily.

Those who wish to trade in gold on the London exchange can find the most recent prices on the London Bullion Market Association website. This site features the most up-to-date prices, directly from the London gold and silver fixings. It can be accessed at http://www.lbma.org.uk/pages/index.cfm.

The gold prices on this site and on most gold fixing sites are given in units known as Troy ounces. Additionally the featured price is listed for a single Troy ounce of pure gold, which is defined as 24 carats. Therefore unless you are interested in trading in pure gold a small amount of arithmetic is required to calculate the gold price that is applicable to your trade.

In order to find out the London gold rate in Troy Ounces for a one carat sample, you must divide the current price by 24. If you wish to work out the price for a sample of a higher carat, simply multiply this figure by the carat number. To work out the price in grams, remember that one troy ounce is approximately 31.1g. Therefore to find the price for 1g, divide by 31.1. In order to find out the exact price for a larger sample, multiply your result by the number of grams in the piece.

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