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Bullion General FAQ |
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1. |
What is Bullion? |
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Bullion is a term used to describe any product
produced from a precious metal whose value is determined
almost entirely by its precious metal content. Bullion
is traded as a commodity and has a market for trading
in quantities, both on delivery and for future trades
(otherwise known as "futures"). |
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2. |
How is Bullion priced? |
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Bullion is generally priced in accordance
with the current market value (or "spot" value)
plus a premium, which varies according to the kind of
bullion. |
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3. |
What are the characteristics
of Gold? |
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Gold is a heavy, yellow, metallic chemical
element and is considered to be a precious metal. Being
malleable and ductile it finds use in the manufacture
of a wide range of products right from jewellery to electronics.
Its chemical symbol is Au - a derivation from Aurora or
dawn. |
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4. |
What is the interest determination
of Hong Kong Gold Market about? |
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Interest determination is one of Hong Kong
Gold Market's characteristics. The determination of interest
is done once a day at 11:00 during weekdays and at 10:30
on Saturday. Positive interest arises when the demand
for physical gold exceeds the supply. Buyers cannot get
hold of gold are awarded interest paid by sellers who
cannot deliver gold. Negative interest arises when the
supply of physical gold exceeds the demand for it. As
a result, sellers who do not get sale proceeds are awarded
interest paid by buyers who do not have sufficient cash
to pay sellers. Even interest arises when supply and demand
for physical gold or cash are in equilibrium - that is
neither party has to pay the interest. Interest is quoted
in Hong Kong dollars per ten taels. |
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5. |
What measures are used to
weigh Gold? |
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Internationally, the weight of gold or gold
articles is usually expressed in troy ounces.
1 troy ounce = 1.097 ordinary ounce
Further, one troy ounce is in turn equivalent to 31.1042
grams.
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6. |
How is the purity of gold
measured? |
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The purity of gold articles/bullion is generally
described in three ways. The three terms that can be used
to describe the purity of the metal are - per cent, fineness
and karats. While karats, one of the more commonly used
terms, measures the number of parts of gold per 24 parts
of the whole, fineness tries to measure the parts of gold
per thousand, whilst per cent tries to measure the parts
of gold per 100. |
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7. |
What is LOCO-London gold? |
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"London Gold" means purchasing
or selling a claim on gold with purity not less than 99.5%.
The size of transaction is at multiple of 100 ounces.
The minimum size for one contract is 100 ounces. The trading
hours of Loco-London gold market extend almost 24 hours
during a business day. No commission is charged for transactions
except for trading at fixings. |
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FX / Commodities
