Definitions of the subject being described
World Markets gold: operation technology
London market gold
Market gold in Zurich
Types of transactions in the gold market
Development of the global gold market
Factors affecting the global gold market
Definitions of the subject being described
World gold markets-this is markets that ensure the implementation of international payments, industrial and domestic consumption, private hoarding, risk insurance, speculative transactions.
World gold markets-this is markets with a wide range of transactions; large transactions are made, and there are no customs barriers. The rules for conducting transactions are not codified, but are established by the market participants themselves.
World gold markets-this is intermediaries between sellers and buyers, making both cash transactions in gold and structured futures transactions.
World gold markets -this is gold trading centers, where this metal is also concentrated and its regular purchase and sale is carried out.
international trade gold
trade gold between the countries of the world is carried out in the gold markets, i.e. special centers where regular purchase and sale is carried out at a market price for industrial and domestic consumption, hoarding, speculative operations, risk insurance, and the purchase of foreign currency for international settlements.
Now there are more than 50 gold markets:
In Western Europe - II markets, the largest of which are in London, Zurich, Paris, Geneva and Frankfurt;
In Asia - 19 markets, the busiest - in Tokyo and Beirut, Hong Kong;
In America - 14 markets, of which 5 - in USA;
Africa has 8 markets.
Organizationally, such centers are based on banking consortiums that are authorized to carry out transactions with gold. Their responsibilities include concentrating applications and carrying out intermediary operations between sellers and buyers.
Depending on the degree of government regulation, gold markets are divided into four main categories:
World - in London, Zurich, frankfurt, Chicago, Hong Kong and etc.;
Domestic free - in Milan, Paris, Rio de Janeiro;
Local controlled - in Athens, Cairo;
- "black" markets - in Bombay.
World and domestic free markets are intermediaries between sellers and buyers through both cash transactions in gold and structured futures transactions. Local markets are suppliers of gold mainly to local consumers.
source suggestions gold in international markets is the development of existing and new deposits. The main gold mining powers are South Africa, USA, Canada, CIS countries, . Annual gold production in the West in some years reaches from 1000 to 1800 tons.
The world gold market is
World gold markets: functioning technology
From ancient times to the present day, it has been a measure of wealth. Stored in ingots, coins, jewelry, it has always riveted the eyes of people. Millennium-long history of the conversion of the noble metals is truly inseparable from the history of the development of human society. was not just a means of payment. It was associated with the discovery of new continents and the collapse of civilizations, bloody wars and gold rushes that periodically hit the world, the settlement of the most inaccessible areas and the development of new industries.
From the moment when gold single-handedly established itself in the role of a universal equivalent, standing out from the variety of other commodities, not one generation of people has changed, but it is precisely the dual nature of gold as a product and means payment predetermined his triumphal procession across all continents. With the improvement of human society, the functions and role of gold changed; it is no longer used as a means payment, but still plays its role in the system of economic relations.
At a certain stage in the development of society, gold acquired the status of money. metal.
Later, on its basis, the system of the gold standard was formed, without which it is difficult to imagine the development of the world economy in the 19th-20th centuries. Later, having overcome national borders, gold became the basis of the monetary system, performing this function, in fact, until the 70s. 20th century
Providing loans secured by gold debt;
Order-structured short and long trades terms performance;
Deals swap by the location of the metal;
Accounts (metal) with deferred tax payments;
Refining, melting, final processing of gold from semi-finished products.
The advantage of Swiss banks over others is their wide presence in the world gold markets in various regions of the world. The Big Three banks are present on the precious metals markets in Europe(in Geneva, Zurich, London), in the USA (New York), in the Far East (Tokyo, Hong Kong), in Australia (Melbourne). This allows them to have a 24-hour presence in the international gold market, making transactions with physical gold and with “paper” metal. Clients are offered gold bars of various sizes and a wide range of operations, including complex derivative financial instruments.
US gold market
Demonetization of gold in the 70s. made it possible to repeal the 40-year-old Gold Ban Act, under which US citizens were not entitled to private ownership of gold in bullion form.
The liberalization of the gold trade led to the rapid transformation of the New York Mercantile Exchange (Commodity Exchange, COMEX) and the International Forex (International money market, IMM) commodity exchange in Chicago ( Chicago Mercantile Exchange) to the largest gold trading centers futures. It is in these centers that more than 90% of all futures on the supply gold.* Therefore, almost all European dealers participate in arbitrage trades or hedge positions taken during the European trading session.
The American futures markets still perform an important economic function today, which consists in the fact that speculators who take risks in these markets create the necessary level of liquidity that allows real producers and consumers gold to hedge against price risk. Most transactions are speculative and do not end with the physical delivery of gold.
Along with futures trading on the New York Gold Exchange, there is a market for gold in bullion form, from where wholesale dealers supply gold to industrial and commercial consumers, and also offer for hoarding in various forms (coins, medals, etc.).
In the last decade, along with the exchanges, the leading American banks, which are currently market makers on the international gold market, such as J. R. Morgan, J. Aron & Co., have been participating in gold trading in the last decade. Finally, there are brokerage firms operating in the US market that actively trade in financial assets and buy and sell transactions with titles of ownership of bullion gold. The New York and Chicago markets, which received intensive development after the lifting of the 1975 ban on residents The US to trade in gold are among the younger gold markets. A feature of these markets is the wide distribution of transactions of a predominantly venture nature. These include term transactions (fornard and futures), which are concluded for 1, 3, 6 months and the execution of which is carried out at a price fixed at the time of the transaction. The amount of the contract is strictly determined by the volume of 100 ounces.
Other Gold Markets exchange. From the end of the 80s. operations are intensively carried out on the Hong Kong gold market, where large gold dealers from Zurich, London, New York and Frankfurt have representative offices. The objects of trade are both gold bars and coins, plates, sheets, gold scrap. Since 1980 Commodity exchange Hong Kong began trading in futures.
Among the relatively new domestic free markets is the gold market in Turkey.
The liberalization of the precious metal trade in 1989 allowed the Turkish market to quickly become a significant regional center for the sale of gold, through which more than 200 tons of gold passed in 1993 (for comparison, in the same year the Republic of Germany imported 140 tons of gold, of which 50% left inside the country for use in jewelry industry, in dentistry, electronics and other industries).
The Turkish market is a supplier of the precious metal both for the national industry and for the Middle East region - to Syria and Iran.
The competition for the Turkish market in the Middle East is the older regional gold market in Dubai, which flourished in the 1950s. was based on the smuggling of precious metals. Currently, Dubai is a supplier of gold for the jewelry industry of India, Oman, Bahrain, Kuwait, Saudi Arabia, and Iran. In 1994 Import Dubai made about 260 tons of gold from Zurich, London and Beirut.
Among the local controlled markets, the gold market stands out Saudi Arabia, which provides raw materials for local jewelry at the expense of import: for example, in 1993 over 100 tons of gold were purchased.
To the local gold market India in 1993, 257 tons of newly mined gold were received, which is 11% of the total world production. Since the liberalization of the gold trade three years ago non-residents received the right to bring with them up to 5 kg of gold per person, and the official increased significantly.
A special place among structured forward transactions is occupied by operations swap with gold, the scheme of which is similar to a similar deal with a currency, i.e. a combination of a cash and counter forward transaction. When buying 500 ounces of gold in a cash deal (slot) at a price of $360 per an ounce the dealer simultaneously sells 5 counter-accounts of 100 ounces for a period of $375 per an ounce. In addition to the obvious profitability, this operation with gold has some other advantages. Therefore, operations are carried out not only by large banks and small financial companies, but also the central banks of countries that need to buy foreign currency without parting with their gold reserves.
Such a deal was carried out in 1976 by the Central Bank of South Africa. who sold 1 - 5.5 tons of gold to Swiss banks on slot terms and simultaneously entered into a forward deal term for 3 months to buy this gold.
The same deal arrangement is used by member central banks to secure 20% contributions towards the gold backing of the ECU money issue based on a three-month swap deal, without losing ownership of highly liquid assets such as gold.
Russian gold market
Russia and today is one of the largest gold producers in the world.
In the process of economic reforms, the importance of gold as one of the elements of gold and foreign exchange reserves is constantly growing. central bank Russia, the growth of which can help stabilize the ruble and raise the country's credit rating in the global financial market.
The current state of gold mining.
Gold mining industry one of many industries Russian industry, which has not experienced a sharp decline over the past five years. The decrease in production volumes from 1991 to 1994 was 9% and from 1994 to 1995 - 7.5. In state USD - CAD was handed over; in 1991 - 168.1; in 1994 - 154.1; in 1995 - 131.938 tons of gold.
Let us recall for comparison that the average decline in industry from 1991 to 1995 was 50%.
However, gold mining has many problems. The basis for the organization of gold mining was: - state for the purchase of metal:
State advance payment of mining enterprises at the beginning of each season;
State monopoly for the sale of bullion gold, including for.
According to the Ministry of Economy, out of 54 mining enterprises 44 are working on depleted fields. The construction of new facilities and the reconstruction of existing ones almost stopped in the industry. In explored reserves, out of 63% of gold ore, only 14% is mined. Today, exploration of new deposits has been reduced and payment for already mined gold is constantly delayed.
Russia in the world gold market.
Despite economic difficulties, Russia is one of the five largest gold mining countries in the world and continues to be one of the main suppliers of gold to the world market. Of the global volume of gold trade, which is more than 3,000 tons per year, the Russian export annually accounts for an average of 70-100 tons.
Today, all operations of the Russian Federation on the world gold market are carried out on the basis of the state monopoly on his export, and the Russian Federation is the agent of the Government of the Russian Federation, which has the right to sell the metal on the foreign market.
On the international gold market Bank VTB 24 is one of the slot market makers, and also conducts forward, option, deposit, consignment transactions, as well as financial swap transactions.
The domestic gold market in the Russian Federation is only making its first steps. Its creation should help solve such problems as finding non-state sources of financing for the gold mining and gold processing industries, subsidizing exploration of deposits, and assisting in the development of the social base of gold mining regions.
Market Participants gold
Gold mining companies
This is an important category of market participants, because they supply the market with the bulk of primary gold. This includes both small companies and large corporations. The more gold it produces, the more it influences the market. This forces other market participants to closely monitor all events related to the activities of large gold miners.
Industrial users
Exchange sector
In a number of countries, the largest exchanges have special sections for trading gold and other precious stones. metals.
Investors
Central banks
Their role in the precious metals market is multifaceted. On the one hand, they are the largest operators in the gold market; on the other hand, their function is to establish the rules for trading gold in the markets.
The active sale of gold from reserves is not the main goal of the activities of central banks, although it is a manifestation of the ever-increasing desire for a vigorous use of reserves. This group of participants has a significant impact on market conditions, and the role of central banks especially increased in the 90s of the XX century.
Professional dealers and intermediaries
This group consists primarily of commercial banks and specialized companies. Dealers play one of the leading roles in any market, as almost all gold initially ends up in their hands.
Types of transactions in the gold market
Spot market
Current transactions of purchase and sale of metal are carried out on a "spot" basis with a value date /date of crediting/withdrawing metal and currency/ on the 2nd working day after the day of the transaction. The international market for current operations is called the spot market /spot market/. The standard lot size on a spot basis is 5,000 tr. oz / troy ounce- a measure of the weight of precious metals generally accepted in world practice. Contains 31.1034807 gr./.
The objectives of the data operations are the formation of a fund of precious metals of a credit institution or the execution of client orders. The starting point for determining price parameters with physical gold is the price of the London market - loco London / The term "loco" means the place of delivery of the metal. It is the most important condition for transactions with precious metals./.
Operations like "swap"
This term is very often used in the economic literature. In relation to the gold market, it can be interpreted as the purchase and sale of metal with the simultaneous implementation of a reverse transaction. Volumes data transactions exceed the volume of "spot" transactions, because gold "swap" does not affect the state of the precious metals market as much as "spot" transactions. The standard deal for these operations includes 32 thousand ounces /1 ton/. In practice, it is customary to distinguish three types of "swap" with gold:
Time swap /financial swap/
This is a classic kind of "swap" operation. It is a combination of a cash and an urgent counter-deal: the purchase / sale / of the same amount of metal on the "spot" terms and the sale / purchase / on the " " terms. The date of execution of a closer transaction is called the value date, and the date of execution of a transaction that is more distant in terms of time is called the swap end date. The agreement can be concluded for almost any period: from one day to several years. Regular terms agreements"swap" are considered 1, 3, 6 months and a year.
The essence of the operation lies in the possibility of converting gold into a currency with the preservation of the right to buy gold after the expiration of the "swap". At the end of the validity period agreements the parties can agree to extend the contract or liquidate the "swap" by doing reverse settlements. If the party that owned the gold does not intend to buy it, then it can be sold on the market or added to the reserves of the bank that provided the funds. Interest rates on a financial swap are the difference between the rates on a dollar deposit and a gold deposit, that is, the rates on gold swaps are lower than those on dollars for a comparable. This is due to the greater liquidity of dollar assets in relation to gold. But there are times when rates for metal exceed rates for Forex market, that is, the rates on financial swaps will be negative. In this case, the "spot" price will be higher than the " forward contract". This situation is called "backwardation" / back-wardation or deportation /. It is caused by a sharp shortage of reachable gold. A similar situation arose, in particular, in the London market in November 1995.
Swap operations have become very popular in recent years. First of all, the benefit of attracting funds in this way is obvious compared to attracting dollar deposits, since the interest rates on "swap" are lower. In addition, it creates the possibility of painlessly attracting gold, which can be used by the bank, for example, to manage balances on metal accounts.
Finally, these operations are very popular among central banks. This is because, in wanting to convert their gold holdings, they may not fear that their actions will have a major impact on the gold market; instead of selling directly on the market, gold is moved between counterparties.
Swap by metal quality
In practice, a situation may arise when a participant in the gold market may require gold of a higher standard than that which he has. This desire can be realized within the "swap" for the quality of the metal. Such a "swap" involves the simultaneous purchase / sale / of one quality of metal against the sale / purchase / of gold of another quality. At the same time, the party selling the higher quality metal will receive a premium, which may depend on the size of the transaction and the amount of risk associated with replacing one type of gold with another.
Swap by location
Such a swap involves the purchase / sale / of gold in one place against the sale / purchase / of it in another place. Since gold can cost more in one place, in this case one of the parties receives a premium.
Deposit operations
Since gold is a financial asset, it can bring to its owner if it becomes an object of a loan. These operations are carried out when it is necessary to attract metal to the account or place it for a certain period. At the same time, gold deposit rates are usually lower than currency rates, which is explained by higher liquidity currencies. Standard deposit terms are 1, 2, 3, 6 and 12 months, but they can be reduced or, conversely, extended.
A bank, attracting precious metals under deposit agreements, can use them for a certain period of time to make a profit, for example, in gold mining financing schemes, for arbitrage transactions, etc. The owners of gold receive income on the invested gold, and are also exempt from the costs associated with the storage of physical metal.
Forwards
In addition to the above transactions, other transactions can be carried out on the world market: we are talking about forward transactions that provide for the actual supply of metal for a period exceeding the second business day. By concluding such a deal, it is insured against an increase in the price of the metal in the future by spot market. The seller, in turn, aims to protect himself from future price cuts. Insurance is provided by fixing the price, on the basis of which it is planned to carry out mutual settlements in the future. However, such a deal does not provide an opportunity to take advantage of more favorable market conditions.
forward contract cannot be cancelled. It can only be balanced / close the forward position / by buying and selling the amount specified in the transaction product at the current rate with its further sale at the rate set by the forward. In the gold interbank market, these transactions are quite rare. If it is necessary to sell metal for a period, it usually sells it on spot terms, and then enters into a swap deal: it buys metal on spot terms and simultaneously sells it on terms of .
Development of the global gold market
Official (but not everywhere real) refusal to perform two functions by gold of money- measures of value and means of circulation - led to the withdrawal of gold from the control of monetary authorities. Thus, the influence of market forces has increased.
The liberalization of the gold market in the world continues. Free purchase - sale, and especially the movement of gold across the border, are not allowed in all countries(including Russia). Even free gold markets are subject to detailed regulation incomparable to other commodities. As the freedom of the market increases, the not most pleasant side of market pricing becomes more pronounced - strong price fluctuations.
In all modern markets, both financial and commodity, the virtual part is constantly growing - derivatives: futures, options, etc. These brainchildren of economic progress, designed to increase liquidity basic asset and hedging risks, have become a huge independent area of profit. The turnover of the real gold market with centers in London and Zurich is only 1 - 2% of the turnover of the "paper" gold market with centers in Chicago and New York.
Because the income here extracted from difference prices for the underlying asset at different times, then in order to maximize it, it is beneficial to greatly swing the price. The more developed the virtual part of the market, the more speculative it is. In the rise in the price of gold in 1980 to 850 dollars per ounce, the role of Chicago speculators was very large, many of which had forwards due.
The last drop in the price of gold was marked by a record turnover of the market. There were large volumes of gold sales by large operators with subsequent acquisition at a better price*.
The most important source of enrichment in such a market is, therefore, special attention is paid to both bad and good news, the significance of which is deliberately exaggerated.
Factors affecting the global gold market
Supply and demand
One of the most important reasons for the decline in the world price of gold was the outstripping growth of its supply compared to the increase in demand. The jewelry industry, which accounts for about 90% of the demand for the yellow metal, could not absorb the increased production volumes. In the business circles of the Western world, there is a revision of the previous views on gold as an effective means of insurance against inflation, depreciation of national currencies.
seasonality
Another feature of the modern development of the world gold market has become a seasonal nature in the movement of metal prices. It manifests itself in the fact that these prices reach their highest level during the year in the middle of winter, while prices fall in the middle of summer. February marks the New Year in China, which is becoming one of the world's leading consumers of gold.
State gold reserves
Switzerland's announcement of a possible sale (if the change in the law is approved in a popular referendum) after 2000, for ten years, 1,400 tons of the gold reserve affected prices as if the deal had already begun
Therefore, not very large sales of gold from the reserves of some central banks, which took place recently, were considered not in terms of physical volume, but as a signal of the formation of a certain trend. If this trend is extrapolated to the end, then the sale of all official reserves will throw 31 thousand tons of gold on the market (a quarter of all available, 12-year production volume). crept down not because of the real sale, but only because of the fact that there has been a trend.
Message central bank Belgium that over the past few months it has sold 299 tons of gold from its reserves in the amount of 2.8 billion US dollars dealt a new heavy blow to gold prices. First, they “collapsed” immediately by $5, dropping to $287 per ounce. Experts predicted that they could well roll back to the lowest level in the last 18.5 years - $ 281.3, recorded in December 1997 after a major sale of gold by the central bank australia.
In this situation, the prospects for gold mining corporations look bleak. Already, half of the world's gold mines have turned out to be unprofitable. Large concerns, and especially those that have hedged futures, are still holding on somehow. But the Canadian company "Barrick gold" is in alliance with "Swiss bank Co".
They are going to support world gold prices with the help of the “third millennium coin” project. The commemorative coin, supposedly one troy ounce in weight, the value of which will be closely tied to the market value, according to Barrick gold experts, will be able to absorb up to one thousand tons of "excess gold".
Now the total world gold reserve is 120 thousand tons, at a market price it is 1 trillion 200 thousand dollars.
In the structure of world production, the share of leading countries is gradually decreasing and the share of developing countries is increasing. Now in the world there is an active exploration of entire undeveloped areas. Over the past five years expenses for the exploration of gold deposits in Africa increased five times, in Latin America - four times. Cheap labor force, favorable tax regime in these countries where governments are very interested in economic development. According to Business Week analysts, if in the US the initial cost of production reaches $240, in South Africa - up to $300, then in many new areas it is only $100. This downward trend in the global average original cost could not help but influence the price.
For a market dependent on information, the worst thing is uncertainty. Out of caution, speculators are counting on the worst case, even if its implementation is small. Therefore, the current price takes into account the option of a collapse in supply and a reduction in demand due to the sale of a large part of the official gold reserves and the sale of private hoarding reserves that accompanies it on a wave of panic. If central banks decide to sell gold from their holdings, then they must first agree and draw up a joint plan - a sales schedule for decades to come, so as not to disturb the market in vain.
Therefore, the question of the share of gold in the reserves of the European Central Bank is given special, exaggerated importance - will it be 30%, as on average for European countries, only 5 - 10%, or even become zero. Statements by major European bankers that European Central Bank a lot of gold is not needed, but that there will definitely be some share, they stopped the precipitous fall in prices, but the reverse growth will still not begin until the issue is finally resolved in April-May of this year (1998).
If we analyze the situation in 1997 of these factors, then in 1997 a new record level was reached risk hedging bars by producers, although this figure was partially offset by a decrease in the option risk hedging Central banks. The table shows indicators characterizing the gold market in 1997.
Sources
Wikipedia - the free encyclopedia
- the sphere of circulation of capital between state-owned farms. M.r.k. began to take shape in the conditions of growth in the export of capital from industrialized developed countries at the end of the 19th century. and was developed in modern conditions, when the scale of export ... ... Foreign economic explanatory dictionaryThe world gold market is considered to be the main link in the precious metals market. In its organizational structure, it consists of a consortium of banks that can deal with the yellow metal.
Their main task is to mediate between the buyer and the seller. They collect preliminary applications for the purchase of precious metals and analyze them, as well as the formation of the global gold rate.
The market is subdivided into the global gold market, domestic free and locally controlled.
In terms of turnover, the dominance in the world market belongs to the stock exchanges of New York, Chicago, London, Zurich.
The London and Zurich market sells South African gold. In the future, most of the gold sold on them is supplied in order to resell it to other precious metals markets.
World gold markets support the dominance of the London market. It is represented by five companies that are officially members of the market. Their representatives twice a day on fixings set the estimated value of the yellow metal.
Since 1968, it has been common practice to price gold in US dollars.
The domestic and local market satisfies the demand for gold from jewelers, hoarders (individuals who purchase gold as jewelry), as well as for investors and industry. Transactions with medals, small bars, coins prevail in the local and domestic markets.
New York Precious Metals Exchange.
Situation on the international market
At the beginning of 1990, the international gold market underwent a significant change. The gold boom of the previous decade was over. This was facilitated by the entry into the world gold market of precious metal ingots, which previously amounted to. The price of gold that prevailed on the world market after the crisis of the 1970s was at a rather high level. This led to the creation of new technologies in the development and exploration of precious metals, which made it possible to exploit previously unprofitable deposits. The price of gold reached its highest value at the beginning of 1980 - above 2,000 US dollars (imagine what it was at that time, taking into account inflation!).
In 2006, gold on the world market had a value of only 620 US dollars per 1 ounce. Subsequently, the price began to rise and reached $800 in 2007, and in 2008 it already amounted to $1,000 per 1 ounce.
Gold price chart 1981-2011.
Stages of development of the global financial market of precious metals
Officially (but not always real) gold in our time does not fulfill the two main functions of money - a measure of value and a medium of exchange. This was facilitated by its withdrawal from the control of the financial authorities. As a result, the influence of the market was strengthened, which led to its further liberalization in the world. Free transactions of purchase and sale, in particular related to the movement of yellow metal across the border, are not possible in all states, including Russia. Even the free world gold market is subject to very detailed regulation incomparable with other commodities. The more the freedom of market relations increases, the more the not very good side of market price formation is manifested - these are strong fluctuations in the value of the precious metal.
All markets, both commodity and financial, are characterized by the growth of the virtual part - various derivative instruments: options, futures, etc. They were created as a result of economic progress to increase the liquidity of the underlying asset and to hedge risks. Subsequently, they became an independent area for profit.
The world gold market with centers in London and Zurich has a turnover of real gold, which takes only 1 - 2 percent of the turnover of the paper metal market with centers in New York and Chicago.
The market for the "physical" metal is only 1-2% of transactions for the sale of gold.
The difference in value at different times on the underlying asset is the main source of income for this market, therefore, in order to increase it, it is beneficial to swing the price a lot.
The world market, having developed its virtual (rather than real) part, has become more speculative. An example of this is the rise in the price of gold to $850 per ounce in 1980, in which Chicago speculators played a large role, with their forward contracts running out of time. The world gold market recorded a record turnover during the last price drop. There were huge volumes of sales of the precious metal by large operators in order to subsequently purchase it at a better price.
Information is a very important source of enrichment in this market. Therefore, news, both negative and positive, are deliberately exaggerated, as they are given special attention.
Factors influencing the global financial market
The first factor is the ratio of supply and demand, which affects any market.
One of the main reasons that influenced the decline in the world price of gold was the outpacing of the growth of its supply in comparison with the decrease in demand.
The jewelry industry, which accounts for the lion's share (up to 90%) of the demand for yellow metal, did not demand the increased volume of its production.
The second factor is seasonality.
There is a feature in the modern development of the world market of precious metals - the nature of the movement in the value of gold is seasonal. The price reaches its highest value in the middle of winter. China plays a significant role in this (one of the main consumers of the yellow metal), in which the new year falls on February. In the middle of summer, there is a decrease in the value of the precious metal.
The Chinese New Year has a significant impact on the seasonal fluctuations in gold prices.
The third factor is government reserves
Recently, some central banks have been selling gold in small volumes, which has already begun to be seen as the formation of a certain trend. This was facilitated by the announcement of Switzerland about the possible sale of gold in the amount of 1400 tons of gold from the gold reserve in the period of ten years after 2000. If this trend intensifies, the sale of reserves from public sources will bring 31,000 tons of the yellow metal to the world market, which will be ¼ of the world's reserves. And that will drive up the cost.
Due to the current situation, more than half of the world's mines would become unprofitable.
The sell-off by Switzerland of its gold reserves may increase the price of gold in the market.
Canadian companies Barrick Gold, in alliance with ‘Swiss bank Co.’, have created a “third millennium coin” project to support prices in the world market with its help.
The weight of the commemorative coin will be 1 troy ounce, its price will have a market formation and will help to absorb up to one thousand tons of "surplus" of the yellow metal on the world market.
The fourth factor is production
The structure of world gold production is undergoing changes. The share of leading countries is decreasing, while developing countries are increasing. Undeveloped areas in the world are being actively explored. For example, financial investments in the exploration of gold deposits in Africa have increased five times in recent years, in South America - four times.
The volume of gold mining also affects its value on the exchanges.
This is facilitated by the presence in these countries of cheap labor and a favorable tax regime. Analysts of Business Week talk about such data - the cost of mining the precious metal is the highest in South Africa and the United States and reaches up to $300, and in new areas about $100. The downward trend in production costs has an impact on the price of gold on the world market.
World Gold Market News 2014
The world gold market expects the most serious changes in the last century. On July 8, 2014, a meeting of the leaders of the World Gold Council and representatives of large banks took place in London. The reform of the London Fixing was discussed. It is planned to change the rules by which the value of the precious metal is set. The fixing procedure has remained unchanged since 1919. The price of gold was not set during the Second World War, and also after it - from 1939 to 1954.
However, over the past hundred years, quite a few claims have been made against the gold fixing. An example is the Barclays bank from the UK, caught in illegal operations when establishing the value of gold. He was fined US$44 million in May 2014 for this fraud.
While the London fixing will be reformed, according to many analysts, sharp fluctuations in the value of the precious metal are likely.
The global gold market in a broad sense covers the entire circulation system of this precious metal on a global scale - production, distribution, consumption. The volume of gold supplies to the global market consists of three sources: gold mining, its recycling and pure gold hedging. At present, the third source has practically no effect on the market. In 2015, gold supplies to the market were determined by its mining (73%) and recycling (27%) (Table 1).
The volume of gold supplies to the market in 2015 amounted to 4,306 tons, having increased by more than 30% compared to 2006, mainly due to the growth in its production and risk hedging.
The peculiarities of the gold market are that, firstly, gold is used by virtually all states as an insurance and reserve fund. The recorded state reserves of gold, concentrated in the Central Banks and the IMF reserves, today amount to more than 31,500 tons.
A significant part of these stocks may be put up for sale. Secondly, the population has even larger amounts of gold (jewelry, coins, etc.). Some of this gold - at least in the form of scrap - also enters the market. As a result, the following picture emerges. The main share in the supply of gold falls on its mining. But production volumes have a significant inertia, respectively, the supply of mined gold from year to year has a relatively small variation - much less than the supply of scrap gold, the sale of gold by banks and investors.
An analysis of the global trends in the development of gold mining and exploration over the past 25 years shows that both increase and decrease in gold production are actively manifesting themselves. The multiple increase in the market price of gold in the seventies dramatically affected the activity of its producers in most countries of the world community. It became profitable to process poor and difficult-to-dress ores; bring into operation off-balance reserves (previously considered unsuitable for production due to technical, technological and economic reasons); to resume the operation of previously abandoned and "mothballed" quarries and landfills, mines and shafts; process man-made dumps of many mining and processing plants containing a certain amount of metals (as associated components or incompletely extracted during primary processing).
Fundamental changes in the technology of metal extraction due to heap, heap with cyanidation and biological leaching in columns, the "coal in pulp" method, the improvement of other pyro- and hydrometallurgical methods (for example, autoclave enrichment of refractory ores) have made the secondary processing of poor ores and preserved " tailings” of gold recovery plants with a gold content of 1.0–0.3 g/t or less.
The geographical structure of gold mining in the world has changed radically over the past three decades. New large gold producers have emerged in the southwestern part of the Pacific Ocean - the Philippines, Papua New Guinea and Indonesia. Gold mining in Latin America grew rapidly. Significant shifts in the territorial structure of gold mining also took place during the 1990s.
Between 1993 and 2005, gold production increased: in Peru by almost 850%, in Indonesia by 368%, in China by 180%, in Mexico by more than 100%, in Mali gold production increased 10 times , gold mining industries were created in Argentina and the Kyrgyz Republic, and this is with a growth of only 8.7% in the world. At the same time, production in South Africa continued to decline - by more than 50% over ten years, and although in 2002, for the first time in 9 years, metal production increased by 1% compared to 2001, in 2003 gold production in this country fell again. In 2015, gold production in South Africa amounted to only 150 tons.
Global gold production has been steadily increasing since 2006 and reached 3,158 t in 2015, up 26% from 2006 levels. almost 2 times.
The top 20 producing countries accounted for 83% of all world gold production in 2015 (Table 2). 
China remains the largest gold producer, far ahead of other producing countries. In 2015, it accounted for 14.5% of world gold production. However, in terms of reserves, it is significantly (4 times) inferior to Australia and Russia. China is followed by Australia, Russia, the USA, Peru, Canada, South Africa, Indonesia and Mexico, which annually extract more than 100 tons of gold. These nine countries account for 62% of the world's gold production.
Over the past 10 years, production has grown most rapidly in Russia (1.5 times), Canada (1.5 times), Mexico (3.2 times), Brazil (1.7 times), Colombia (1.8 times) and China (1.9 times).
In the US, Peru and especially in South Africa, production was declining. In other countries, it generally stagnated. As a result of these trends, South Africa has lost its role as a world leader in gold production, dropping to seventh place. The United States moved from second to fourth place, while Russia moved up from sixth to second (Table 3). 
Gold mining and refining make a significant contribution to the country's economy. Such a contribution is determined by the size of conditionally net production (value added). This indicator is usually calculated in two ways. The first, the so-called. income, includes calculations of the amounts of operating profit, depreciation and labor costs. The second method is the so-called. production, in which conditionally net production is calculated as the volume of gold sales minus the cost of intermediate goods and services consumed in production. According to calculations, the volume of nominally net production in the gold mining industry of the 15 leading mining countries in 2012 amounted to $ 78 billion. This amount exceeds the national income of such countries as Ecuador or Azerbaijan with a population of 15 and 9 million, respectively, or 30% of the gross Shanghai product. The contribution of gold mining is especially important for a number of developing countries. Thus, the gold mining company Newmont Ghana Gold creates 48.3 thousand jobs in Ghana, of which 1,700 are in the company itself and 5,100 in supplier companies. If we take into account all the activities associated with gold mining, then the total number of jobs in this country reaches 32 thousand.
A similar study conducted by the World Gold Council showed that the four largest gold mining companies in Peru directly created 4.5 thousand jobs in this country and contributed 1.4% to the country's GNP. Another 4,000 workers were employed in related industries.
The volume of conditionally net production of the gold mining industry for the leading countries is shown in fig. 1. China’s gold mining generated the largest volume of value added products – $12.6 billion in 2012. 
However, its contribution to the country's GDP was insignificant - only 0.2%. In the US, Russia, Australia, and Peru, PPPs were $9.3, $8.6, $8.6, and $8 billion, respectively.
The largest contribution of gold mining products was recorded in Ghana - 8%, Uzbekistan - 5%, Papau New Guinea - 15%, Peru - 3%, Tanzania - 6%. For these countries, gold mining is a large and important sector of the national economy. Value added per ounce of gold mined ranges from $946 in China to $1,352 in Peru, with a global average of $1,139.
Another indicator of the contribution of gold mining to the economy is the number of employees. Such data for 15 leading countries are given in Table. four. 
Comparison of production volumes with the number of employees reveals a picture of the efficiency of the gold mining industry. Some of the highest production rates were recorded in the USA (20.8 kg/person), Peru (18.8 kg/person) and Canada (15 kg/person), and the lowest in China (4 kg), Russia (1 .7 kg) and South Africa (1.2 kg). The average volume of value-added production produced in gold mining per employee in 14 leading producing countries was $295,000. At the same time, it was the highest in the USA - $842,000, and the lowest - in South Africa - $40,000 .
In 2015, 6 out of 10 companies reduced their production volumes, which was mainly due to low gold prices, one of the consequences of which is the reduction in capital expenditures and the development of new deposits. The depreciation of national currencies has a short-term positive effect mainly on those companies that operate within the same or closely related markets, which explains the generally worse dynamics of gold mining by the largest producing companies, which in most cases operate in several markets.
In January 2017, the Russian company Polyus acquired the right to develop the largest gold deposit, Sukhoi Log. Gold resources in this deposit are estimated at the level of 1953 tons, silver - 1541 tons. Such resources make it possible to extract 80–90 tons of gold and 20–25 tons of silver per year. Sukhoi Log's achievement of planned indicators will become a global phenomenon, moving Polyus from ninth to second or third place in the world. 
The given data relate to the official sector of gold mining, large and medium-sized companies. However, the handicraft and small business (ASM) sector also plays an important role in gold mining. This sector is characterized by the exploitation of small and so-called. marginal deposits, lack of significant capital, high labor intensity and weak links to the market and related services. According to some estimates, the artisanal and small-scale industry sector produces 330 tons of gold annually, or 12% of the world's total production. The level of employment in this sector is difficult to estimate, but, according to some calculations, it is 10 times higher than employment in large mining companies, i.e. is at the level of 5 million people. .
The earnings of gold miners in this sector range from 5 to 10 dollars per day. This sector is also characterized by weak state control, almost no social protection, the use of child labor and gold smuggling by criminals. Table 1 gives an idea of the role of the sector of small companies and handicrafts in the gold mining of a number of countries. 6. 
Another important indicator of the development of the gold mining industry is the level of investment in the industry by mining companies. In table. 7 presents data on capital investments of gold mining companies in 14 leading countries of the world (for which there are official statistics). Capital investments are divided into two types: current investments to maintain current operations and investments to expand production (production), as well as to develop new deposits. 
In 2012, the total volume of investments in gold mining by the leading countries of the world amounted to almost 18 billion dollars. These data do not cover the entire production, since in some countries, especially in China, such statistics are significantly underestimated.
It is noteworthy that investments in the expansion and development of production are almost twice as high as investments in maintaining production.
However, the situation varies by country. The countries most focused on further growth in gold production are Canada (investment in expansion is 5.6 times more than maintenance costs), Russia (6 times), Brazil (4.2 times), Argentina (4.5 times). But in countries such as South Africa, Indonesia and China, capital investments are directed mainly to maintain current production, which indicates a possible reduction in the medium term.
For some countries, gold mining is a significant source of exports and, consequently, a source of foreign exchange earnings (Table 8). 
The largest exporters of gold in the world market are the USA and China, the export volume of which in 2012 amounted to $34 billion and $23 billion, respectively. - 26%, for Peru - 21%. For the United States and China, despite their leading positions in gold mining, its exports did not play a significant role in the total exports of these countries, accounting for 2.2 and 1.1%, respectively.
As a major sector of the national economy generating employment and a social product, gold mining by mining companies provided cash receipts to countries where such companies operated through a variety of taxes and fees. Table 9 summarizes the taxes and fees levied on gold mining companies in the world's leading countries. 
Table 9 shows that the most common tax in the gold mining industry is a royalty levied on the volume of turnover, reflecting the level of resource utilization. Another common tax is a license fee collected at the beginning of the exploitation of deposits.
These tables allowed PwC to calculate the volume of payments received by the state from gold mining companies in the top 14 countries of the world. This information is presented in Table. ten. 
The table shows that the largest revenues to the state budget from gold mining are recorded in China and Russia, respectively, 1400 and 800 dollars. Both countries have relatively high royalty rates per ounce and large production volumes.
Unlike royalty payments, receipts from other taxes and fees are difficult to estimate. In many cases, these payments fluctuate from project to project. Moreover, tax payments in gold mining can change over the life cycle of mining. Thus, during the period of exploration, permitting and preparation of the field, which can last from seven to ten years, tax revenues are usually minimal. After the start of production, revenues from royalties and excises appear. However, until the initial investment pays off, corporate income tax revenues are also minimal.
Recycled gold is gold obtained from the processing of gold-bearing products, or scrap.
In table. 11 presents data on the production of such gold by country. 
As already noted, the production of gold from production waste is a significant part of the total supply of this metal to the global market. However, over the past 10 years, the role of this segment in the global gold market has decreased from 37% in 2006 to 27% in 2015. At the same time, in a number of countries, such as China, Russia and the UK, the production of such gold has increased markedly, and in the United States , Indonesia and South Korea, on the contrary, decreased significantly. As a result, the United States and South Korea have lost the leading positions they held in the mid-2000s.
In the world market, the total demand for gold is formed from four main parts:
Buying gold by central banks
Investment demand for gold bars and coins
Jewelry
Manufacturing industry and technological use
The role of each of these sectors is presented in fig. 2. 
The main gold consuming countries are clearly divided into two groups. On the one hand, this is a group of technically developed countries. They use gold relatively widely in various fields of technology and industry, as well as for the manufacture of jewelry. Among the countries leading in the use of gold for technical purposes are Japan, the USA and Germany.
Here, gold acts as an indicator of the development of high technologies in the electronic and electrical, space, instrument-making industries, etc.
Gold is an important element of reserve assets for central banks and investors. Central banks are thus an important source of demand for gold and their purchases in 2012 amounted to 535 tons, or 12% of the total demand for the metal. The price of gold is quite resilient to inflation and allows central banks to effectively hedge against exchange rate fluctuations associated with economic and monetary policy. One of the latest studies by the World Gold Council shows that gold is an effective alternative in the strategy of central banks to diversify reserves. In addition, the price of gold is resilient to macroeconomic shocks and therefore able to maintain liquidity during times of economic turmoil.
The weak dependence of gold on the dynamics of key currencies and a strong negative correlation with the dollar makes gold an ideal investment for risk hedging. Due to these properties, gold is also an object of investment by individuals and companies, which account for 35% of the world's demand for the metal. The largest segment of demand for gold is the production of jewelry, which accounts for more than 40% of global demand. The world's largest producers of gold jewelry are India and China (Table 12). 
Over the past ten years, the share of the top 10 gold jewelry manufacturers has grown from 69% to 77%. At the same time, in all countries except China and India, such production tended to decrease, especially in Turkey, Japan and Italy. As a result of growth in production in India and China, the share of these countries in 2015 exceeded 50% of world production.
Gold is also used to produce various industrial technological goods. Such qualities as electrical conductivity, ductility and resistance to corrosion have made gold an important component in the manufacture of electronic equipment and instruments. In some areas, such as installation wires (due to the high cost of gold components), alternative metals (copper, silver) are increasingly being used. However, they are not an ideal replacement for gold (having some similar characteristics) mainly due to less corrosion resistance.
Even in the production of mounting wires, gold continues to play a leading role per unit length (1 m). Gold is also indispensable in the production of devices operating under increased load, aggressive environments and safety requirements (automatic brake systems and medical equipment).
The largest industrial consumer of gold is the electronics industry (70% of industrial gold consumption). Gold also plays an important role in healthcare and pharmaceuticals due to its biocompatibility and resistance to the spread of bacteria. Research is underway on the use of gold in the treatment of cancer and some biomedical devices. Gold is part of medical diagnostic devices. For example, in 2012, 160 million malaria test kits were used around the world, each containing gold nanoparticles to accurately and efficiently diagnose and treat the disease at low cost .
Finally, gold is increasingly being used in green technologies, including clean energy production, emissions control, and as catalysts in chemical processes. For example, in the automotive industry, gold is expected to be used in exhaust catalytic converters to reduce emissions of harmful substances into the atmosphere.
In table. 13 presents statistics on the industrial consumption of gold in a number of leading producing countries. In total, about 400 tons are sent for these purposes in the world. The main industrial consumer is the electronics industry with a share of about 70%. China and the USA are the main consumers of gold for industrial purposes; with the United States leading in consumption in electronics and China in dentistry. In general, the seven leading countries presented in Table. 13 accounts for about 50% of the world's industrial consumption of gold. 
The specificity of gold as an investment product affects its price, the volatility of which is much higher than the volatility of prices for most other mineral resources, which is explained by the high share of the investment component in the demand structure.
In addition to prices, the problem for the industry remains the decline in capital investments in the depletion of deposits with a high content of gold in the ore. The low level of investment in the development of new deposits may, over time, lead to an increase in average costs per ounce of metal mined and a decrease in already price-pressed margins.
In 2012, gold prices peaked at $1,684 per ounce on average for the year, which was primarily due to strong demand for the metal from investors. In 2013, gold prices slightly decreased, but remained at a fairly high level - about $1,400 per ounce. In 2015, the average gold price was $1,160.1 per ounce. In 2016, gold prices began to rise and rose above $1,300 per ounce. 
As you can see, gold is not going to lose its position as one of the leading financial instruments, although formally the yellow metal has not been synonymous with money for more than thirty years: after the abolition of the gold standard in 1971, no currency is associated with the price of gold, and settlements between states are carried out according to a form more modern than the physical movement of ingots from one vault to another. But the gold reserves of states remain an essential factor in its power. This becomes especially noticeable in times of economic instability: even a not too deep crisis inevitably entails an increase in gold prices. If we also take into account that the volume of world gold production is falling, and the demand for the precious metal (not only from financial institutions, but also from the aviation, space, jewelry industries, as well as medicine), on the contrary, should grow, it is easy to conclude that gold mining is still a profitable and socially significant business.
6.2. Participants of the gold market and its functions
The modern gold market has a complex functional structure, dependent on many external and internal factors. Its formation and development took place simultaneously with the evolution of the world monetary system and was naturally associated with the financial role of gold in the global economic system.
The global gold market in a broad sense covers the entire circulation system of this precious metal on a global scale: production, distribution, consumption. Sometimes this concept is also considered in a narrower sense - as a market mechanism that serves the purchase and sale of gold as a commodity at the national and international levels.
As a systemic phenomenon, the gold market can be viewed from two points of view - institutional and functional.
Institutionally gold market is a set of trade associations and specialized institutions that carry out continuous trading in cash gold and its derivatives on the basis of the largest trade and financial centers at all levels of the organization of economic relations. Its functioning occurs through the implementation of supply and demand for the metal.
Among the market participants, the following groups can be distinguished:
zolottery mining companies. This is an important category of market participants, as they supply the market with the bulk of primary gold. This includes both small companies and and huge corporations. The more a company mines gold, the stronger its influence on the market. This forces other market participants to closely monitor all events related to the activities of large gold miners (mergers, bankruptcies, etc.);
exchange sector. In a number of countries, the largest exchanges have special sections for trading gold and other precious metals. A variety of instruments related to gold can be traded there: futures contracts for metals, bars and coins, securities denominated in gold;
central banks. Their role in the precious metals market is multifaceted. On the one hand, they are the largest sellers and buyers of gold; on the other hand, their function is to establish the rules for trading gold in the markets;
professional dealers and intermediaries. This group consists primarily of commercial banks and specialized companies (trade associations, market makers, dealer, brokerage and clearing houses). Dealers play a leading role in any market, as almost all gold initially ends up in their hands.
The sources of covering the demand for gold are: new mining, gold scrap (scrap), supplies from state reserves, de-desauration (supplies from private savings). The first two sources are sources of primary metal, the sale of which increases the total volume of the accumulated mass of gold in the world. The rest are sources of secondary metal, which enters the market in the order of redistribution of previously accumulated funds. Receipts of primary metal predominate.
It is customary to distinguish between two main methods of gold mining: loose and ore. Despite the fact that alluvial deposits (sand and other soils containing gold) are called “the main source of gold on our planet”, its industrial development is often unprofitable. The world average placer gold production is 7%. Russia is the undisputed leader in placer gold reserves, producing an average of 16% annually. The development of ore deposits is the most large-scale and profitable way of gold mining: in the world, about 93% of gold is mined by ore, in Russia - 84% 1 . Currently, more than 60 countries are engaged in gold mining at an industrial level. Over the past 20-25 years, the annual world gold production has increased significantly: from 1908 tons in 1988 to 2500 tons in 2006; 2409 tons - in 2008; 2572 tons - in 2009; 2652 tons - in 2010 (growth 39%) 1 . Such high rates of production of yellow metal are largely associated with the use of advanced technologies used in the processing of low-grade gold ores. In particular, the coal-sorption technology for extracting gold and the heap leaching method are widely used. The main producers of gold are South Africa, Australia, USA, Canada, China, Russia. Russia ranks among the top ten countries in terms of gold mining, accounting for about 7% of the world market 2 .
In recent years, major structural changes have taken place in global gold mining. First of all, this concerns its geographical structure. So, if the traditional leader of world gold mining, South Africa, produced 675 tons of gold in 1980, in 1990 - 605 tons, then in 2006 - only 254 tons, having lost its position as the world's largest gold producer. South Africa was replaced by a new leader - China, which produced 270 tons of gold in the same 2006. In 2009, the volume of gold production in China reached 313.98 tons, in 2010 - 340.0 tons, making it the world's first for the fourth year in a row. New large gold producers also appeared in the southwestern part of the Pacific Ocean: the Philippines, Papua New Guinea, Indonesia, Latin America. For example, Indonesia in 1992 produced 2 tons of gold, in 2005 - already 114 tons; in Peru, gold production increased from 18 tons in 1992 to 203 tons in 2006. One of the most important trends has been the increase in production in the poorest countries, which often exist mainly due to the export of gold. For example, the share of gold in total exports in Ghana is one third, and in Mali - half 3 . Table 6.2. GFMS World Top 10 Gold Producers 2006-2009*
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Seat/tons | ||||||||
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Australia | ||||||||
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Indonesia | ||||||||
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Uzbekistan | ||||||||
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Total in the world |
* Source:FinancialTimes. 2011. 14.01.
Functionally, the gold market is a trade and financial center where gold trading and other commercial and property transactions with this asset are concentrated, and which essentially brings together the agents of demand and supply of gold, ensuring the realization of their commercial interests on mutually beneficial terms. From this position, the functioning of the gold market should provide a set of various relationships between market entities, from the stage of exploration, mining, processing of gold up to its industrial and jewelry consumption, the creation of a gold reserve by the state and hoarders.
There are more than 50 gold trading centers in the world, including: 11 in Western Europe; 19 - in Asia; 14 - in America; 8 - in Africa.
The largest volume of transactions with physical gold falls on London and Zurich. At the same time, all market participants are divided into two groups: market makers and ordinary participants. Market makers (participants forming the market) are obliged to constantly maintain two-sided bid and sell quotes, informing interested parties (their clients, other market makers) about this. Ordinary participants do not form market prices, focusing their activities on the quotes of market makers. An important role in the London market belongs to the Bank of England, which controls the wholesale market for bullion gold.
The majority of market participants are former brokerage houses that previously specialized in importing gold and selling it to the Bank of England, and now are divisions of the largest banks in the world. The most famous firms include:
M.Rotschild and sons;
Hoccatta & Goldsmith(subdivision Standard Chartered Bank);
Samuel Montague(subdivision Midland Bank PLC); Sharp Pixley(subdivision Deutsche Bank).
Market participants can provide brokerage services, acting on behalf of and at the expense of their clients, bringing buyers and sellers together. Brokers are rewarded with commissions from concluded deals. There are only two purely brokerage companies in the interbank market: tradition Financial Service in London and PREMEXA.S. in Zurich. They do not provide their quotes and do not hold open positions. The company's profit is generated from the commissions they receive for facilitating spot transactions.
As for dealers, this role is primarily played by the largest banks and their affiliated structures. This is due to the fact that large funds must be mobilized to conduct regular wholesale operations in international trading centers. Most often this is achieved by attracting bank loans. In addition to the wholesale trade in standard bullion, small bars and coins from different countries are also traded in London.
Speaking about the London market, one cannot ignore the procedure of "fixing" - setting the approximate price of gold, taking into account which actual transactions are made in the markets. Five permanent members take part in the fixing, each of which sends its representative: Rothschild bank; standard Chartered bank; Republik National bank; Deutsche bank; midland bank.
Initially, fixing was carried out once a day, and the price was fixed in British pounds. In 1968, changes were made to the fixing system to reflect the increased importance of the US market and the dollar: a daily fixing procedure was introduced, coinciding in time with the start of a business day in New York; instead of quoting prices in pounds sterling, a quotation in dollars was introduced. In this currency, prices are set and most often payments are made on transactions. Thus, twice a day (morning fixing at 10:30 a.m.; evening fixing at 15:00 London time) the equilibrium price is determined. Equalization of supply and demand for the metal is achieved by matching customer orders to buy and sell gold. Fixing participants continuously comment on the fixing process to their customers, containing information about the number of placed orders. During fixing, the client has the right to change the volume of his order. After fixing the price, the execution price of fixed orders is determined. At the same time, a sell order is executed at a fixing price of +0.05 dollars, and a buy order is executed at a fixing price of +0.25 dollars. The difference between the selling and buying prices is the income of the fixing participants.
This mechanism allows any market participant to trade gold on equal terms, so that large volumes of gold can be bought or sold with a minimum difference between the sale and purchase price. The price of the London fixing is instantly transmitted by means of communication to other centers gold trading, is published in the media and serves as the basis for pricing in other markets.
Fixing on silver is carried out daily once a day. Here, three participants take part in the price setting procedure. Unlike fixing gold, which is carried out by a company representative N. M. Rotschild & sons, the procedure for fixing silver is carried out under the guidance of a representative standard Chartered. In contrast to the gold fixing, the silver fixing is closed, i.e., during the procedure, it is impossible to change the volumes of submitted orders. The silver price is set in US dollars and then converted into British pounds. Commissions for silver fixing participants are:
1/16% of the seller's price;
3/16% of the buyer's price;
In addition to fixing for gold and silver, fixing for platinum and palladium is carried out twice a day. The conditions for their holding, basically, coincide with the conditions for holding gold fixing.
The gold market in Zurich, as noted, is formed by a pool of the largest banks of a universal type that conduct transactions with gold at their own expense, i.e., they act not as brokers (as participants in the London market), but as dealers. Therefore, their income is formed not from commissions, but from the difference in the prices of buying and selling gold. It should be noted that it is much more convenient for gold miners to sell the metal directly to banks - members of the pool, and not to intermediaries.
The actions of universal banks - market participants can have a serious impact on market conditions. At the same time, the higher the participant's share in market operations, the greater his ability to influence the emerging situation by setting the price. The largest banks send part of the purchased metal to the retail market, which is highly developed in Switzerland.
Speaking about the objects of physical trade, it should be noted that at present the forms and rules of trade in precious metals are standardized.
In order to provide industrial consumers with gold, as a rule, the consignment trading method is used. At the same time, the owner of gold (a bank, a specialized company) delivers the metal to the consumer's warehouse without prepayment, subject to the condition of buying back the gold within a certain period. After that, the buyer periodically concludes deals with the owner for a certain amount of metal in stock. The transfer of ownership of the goods in the warehouse is carried out at the time of settlement of the transaction. Until then, the owner of the gold retains ownership. If the metal is not redeemed within the specified period, it is subject to return to its owner from the consumer's warehouse. The advantages of this method include uninterrupted supply of metals to consumers, saving the bank's costs for the supply of metals, the ability to quickly respond to market fluctuations, that is, not to miss the time that is optimal in terms of transaction efficiency.
Trading in physical metal is based on the use of metal accounts such as allocated (allocated) – custody accounts. They are intended for temporary storage of metal in banks with further sale or transfer to another place. The use of such accounts entails the cost of storing the metal. The peculiarity of this account is as follows: the bank that maintains this account does not have the right to use the metal in any form; from this account only those ingots that were put on it are received.
The object of trade in the physical delivery of the metal is refined gold in bars of a certain size. These bars are often referred to as bank or financial bars. The best known standard is London Good Delivery. It contains a number of basic requirements:
ingot weight - 350-400 ounces (11.5-13 kg);
the refiner branding the bullion must be included in a special list of the London market;
the purity of the metal must be at least 995 parts of pure gold per 1000 parts of the ligature;
There must be a number of obligatory marks on the ingot:
serial number;
the brand of the manufacturer and the assaying authority indicating the weight to the nearest 0.25 troy ounces.
The surface of the ingot should not have pores and depressions; the ingot should be convenient for carrying and storing. Cash settlements for 1 troy ounce (31.1034807 g) of fine gold are carried out in US dollars. The quantity of gold supplied must be expressed in whole numbers corresponding to the physical quantity of gold bars. Since the technical characteristics of ingots are standardized, ingots that meet the standard appear when concluding contracts.
Other precious metals are also traded in standard bullion. In calculations for gold, the mass of chemically pure metal contained in ingots is taken into account; when trading other precious metals, the total weight of the bar (including impurities) is paid.
Naturally, not all gold transactions are carried out in London with gold of the same standard and the same size of bars. However, the market price of London-design cash bars is the basis for determining the value of all physical gold transactions. With its help, the price of gold is set in other centers of trade, taking into account the cost of transporting gold between points, the cost of bringing the sample to different values, and, of course, taking into account supply and demand in the market. In this case, it is not the price itself that can be quoted, but the amount of the allowance or discount in relation to the cost of the London sample bar.
Small, non-standard bars can be traded in domestic markets, where there is a corresponding demand from local hoarders. The most popular type of investment among this group of investors is the purchase of gold coins and medals.
As for the non-cash metal market, it does not provide for the physical movement of valuables. This principle is the basis for settlements in the interbank market, carried out through clearing companies. The mechanism of functioning of such companies is not fundamentally different from institutions involved in currency clearing. In addition, a clearing company specializing in gold transactions provides physical delivery of gold bullion.
The transfer of ownership of non-cash metal is carried out by making entries on metal accounts of the type unallocated (anellocated), in which gold is accounted for not in certain bars, but in grams or ounces. Such accounts are opened in the largest banks, and the terms of delivery for them are negotiated in relation to certain trading centers. This account takes into account the bank's debt to the client, reflected in a certain amount of metal. The opening of such an account is accompanied by the conclusion of an agreement with the bank, which specifies the rules for maintaining an account.
Depositing metal into an account is accompanied by its delivery to the bank's vault, or the purchase of metal on the interbank market. For the storage of metal, as a rule, no fee is charged. Getting physical metal is also free. Interest is not charged on such accounts. Accounts are settled using the SWIFT system. The gold is transferred by the seller to the buyer's clearing account, and the currency (usually US dollars) is transferred by the gold buyer to the seller's dollar clearing account.
Market gold - this is the sphere of economic relations associated with the purchase and sale of gold in order to accumulate and replenish the country's gold reserves, business organization, industrial consumption, etc.
Organizationally, these are consortiums of local banks and specialized firms that, along with trade, carry out refining(gold refining) and produce ingots of various sizes. markets - from 5-10 g to 1 kg, as well as sheets, plates, in the form of sand, coins. The sellers are gold-mining countries, central banks, owners of reserves. Buyers are private firms and individuals, industrial firms, investors. London and Zurich remain the world's main gold markets. In international markets, gold is sold mainly in standard bars weighing 12.5 kg of 995 or 999 samples with hallmarks of refineries and mints, on domestic
The price is determined by the ratio of supply and demand. London is operated by the London Bullion Market, which is controlled by the London Gold Market Association. Association members are divided into three groups:
market makers, there are 9 of them, including the largest banks;
ordinary dealers - 51;
associate participants from different countries - 38.
The association operates under the supervision of the Bank of England. The price of gold is fixed twice a day: at 10.20 and 15.00. Settlements are completed through clearing houses in the same manner as on currency exchanges. The price fixed in the London market is the spot price. Forward prices are affected by the exchange rates of major currencies and money market interest rates.
Golden fixing (EnglishGold Fixing ) - a daily gold price fixing method that has been used in the London Interbank Gold Market since September 12 1919. The price of gold resulting from the London Gold Fixing is practically the world price for the supply of that physical metal and is used as a benchmark in the vast majority of contracts for the supply of physical gold. The price is set by London Gold Market Fixing Limited based on the existing supply and demand for gold.
Stock exchanges of New York and Chicago - world trading centers for futures contracts. Venture capital deals are widely developed - forward and futures contracts for 1, 3 and 6 months at the price at the time of the transaction.
At the end of the 60s of the XX century. Zurich came to the fore when South Africa began to sell more than 80% of its gold production through this market, establishing direct contacts with Swiss banks.
The largest domestic gold markets in Europe are Paris and Milan. Frankfurt am Main, in Asia - Tokyo, Bombay, Dhaka. Karachi, in Africa - Cairo, Alexandria, Casablanca, in Latin America - Buenos Aires. Rio de Janeiro.
Soviet Union since the 70s of the XX century. acted as a seller of gold - independently or through intermediaries. Gold was sold mainly in Zurich. The purpose of sales is to solve balance of payments problems. Any transactions with gold on the domestic market were strictly prohibited and prosecuted.
In the 1990s, the state lost interest in gold mining. Mining and production of gold in Russia fell sharply, the Bank of Russia and Gokhran significantly reduced their purchases of gold. However, the country remains a major participant in the global gold market. In recent years, gold mining has been gradually increasing. The average cost of producing Russian gold is estimated to be around 200 USD/oz, well below the world average. This makes the production and export of gold an extremely profitable industry. However, in the future, the cost of gold will increase, since the vast majority of its reserves are in ore deposits.
Gold mining in Russia is carried out by more than 600 enterprises in 28 regions, the vast majority of which are very small. The largest market operators are Norilsk Nickel (a merged company of OJSC Polyus-Zoloto) and ALPOCA. After 1998, individual banks also showed interest in financing gold mining. The activity of foreign companies on the market is limited, but they still mine more than 15% of all Russian gold (British, Canadian and Irish firms).
An obstacle to the development of the domestic market for gold in bars, coins, plates, etc. in the Russian Federation is the imperfection of tax legislation. Buyers of gold pay a high value-added tax, which obviously makes all transactions for the purchase and sale of gold unprofitable. Moreover, these tax barriers, like any restrictions, stimulate the development of the shadow, black market for gold.
gold market(Gold Market) is a market where cash, wholesale and other transactions in gold, including standard gold bars, are made. The bulk of transactions with physical gold is carried out between banks and specialized firms; futures and options trading in gold is concentrated on derivatives exchanges.
In Russia, the footprint is regulated. law : FEDERAL LAW dated March 26, 1998 No. 41-FZOn Precious Metals and Precious Stones (as amended on November 21, 2011)
This Federal Law establishes the legal framework for regulating relations arising in the field of geological study and exploration of deposits of precious metals and precious stones, their extraction, production, use and circulation (civil circulation), including:
establishes the scope of the state monopoly;
establishes the goals, principles and features of state regulation of the activities of legal entities and individuals;
establishes the powers of state authorities of the Russian Federation and state authorities of the constituent entities of the Russian Federation;
determines the conditions for the functioning of the market of precious metals and precious stones on the territory of the Russian Federation;
determines the status of the federal assay supervision, the State Fund of Precious Metals and Gems of the Russian Federation, the gold reserves of the Russian Federation, state funds of precious metals and precious stones of the constituent entities of the Russian Federation
On Monday, October 21, 2013, the Moscow Exchange launched trading in gold and silver for the first time in Russia. And from the first half of 2014 it will trade in platinum and palladium. True, if there is interest in these operations. This is stated in the message of the MICEX.
Loan capital market
The loan capital market as one of the financial markets can be defined as a special area of financial relations associated with the process of ensuring the circulation of loan capital.
The main players in this market are:
Primary investors, i.e. owners of free financial resources, mobilized by banks under various conditions and converted into loan capital;
Specialized intermediaries represented by credit and banking institutions that directly raise funds and turn them into loan capital;
Borrowers - in the person of legal entities and individuals, as well as states experiencing a temporary lack of financial resources.
Over the past 20-30 years, the savings of the population have been used as a source of loan capital. This trend is typical for the USA, England, Canada, France and other countries. Savings are expressed in bank deposits, in the reserves of pension funds, insurance companies and the purchase of the Central Bank.
The modern structure of the loan capital market characterized by two main features: temporary and institutional.
The movement of loan capital is carried out through the loan capital market. The modern structure of the loan capital market is characterized by two main features: temporary (Fig. 8.1) and institutional (Fig. 8.2).
1) On a temporary basis distinguish money market, which provides loans for a period of several weeks to one year, and directly capital market where funds are issued for a longer period: from 1 to 5 years (medium-term loans market) and from 5 years or more (long-term loans market).
Rice. 8.1. Time Structure of the Loan Capital Market
2) By functional-institutional On the basis of the modern loan capital market, there are two main links:
the credit system (a set of various credit and financial institutions);
securities market.
The securities market is divided:
to the primary, where new securities are bought and sold;
exchange (secondary), where previously issued securities are bought and sold;
over-the-counter market where securities are sold that cannot be sold on the exchange. The over-the-counter market is also called the street market.
Both signs of the loan capital market are characteristic of all developed countries, however, of course, the state of the national market is judged on the second (institutional) basis, especially in terms of the presence and degree of development of its two main tiers:
Credit and banking system;
Securities market.
The functions of the loan capital market are determined by its essence and the role it plays in the system of social management.
Rice. 8.2. Institutional Structure of the Loan Capital Market
The temporal and institutional features of the loan capital market are characteristic of all countries.
The essence of the loan capital market is manifested in its functions:
Maintenance of commodity circulation through credit.
Accumulation of monetary savings (savings) of enterprises, the population, the state, as well as foreign lenders (servicing sources of loan capital).
Transformation of monetary funds directly into loan capital for its use in credit form in the sphere of social production.
Servicing enterprises, the population and the state as consumers of loan capital.
Performing these functions, the loan capital market acts as a kind of intermediary in the movement of capital. Reflecting the accumulation and movement of money capital, the loan capital market is organically connected with the movement of value in its monetary form, with the formation and use of various monetary funds in the form of credit resources (real capital) and securities (fictitious capital).
Allocate five main functions of the loan capital market :
maintenance of commodity circulation through credit;
accumulation of monetary savings of legal entities, individuals and the state, as well as foreign clients;
the transformation of monetary funds directly into loan capital and its use in the form of capital investments to service the production process;
serving the state and the population as sources of capital to cover government and consumer spending;
acceleration of concentration and centralization of capital for the formation of powerful financial and industrial groups.
The level of development of national markets for loan capital is determined by a number of factors, among which are: the economic development of the country; traditions of the functioning of the credit market and the securities market in the country; the level of productive accumulation in the country; the level of savings of the population.
The development of national loan capital markets is determined by a number of factors:
economic development;
traditions of the functioning of the credit system and the price market. papers;
level of productive accumulation and personal savings.
However, the country's economic development remains the dominant factor (this concept includes not only the potential of industry and other branches, but also the volume of money capital accumulation). This criterion is best met by the United States, Western European countries and Japan, where there are developed, flexible and powerful markets for loan capital.
The backward and undeveloped markets for loan capital are represented mainly by the credit link represented by the central bank, as well as a small number of commercial and specialized banks, the volume of operations of which is low. Here virtually no securities market. At the same time, the vital activity of the capital market of these countries depends on constant cash injections from the state and foreign banks (Latin America).
The securities market is divided:
on the primary where new securities are bought and sold; secondary- this is the market on which previously issued securities circulate;
exchange where securities are bought and sold on stock exchanges; over-the-counter a market where securities are sold that cannot be sold on the stock exchange. The over-the-counter market is also called the street market.
At the same time, the state of the national market is judged on an institutional basis, i.e. by the presence of two main tiers: the credit system and the securities market.
The primary market arises at the time of the issue of securities, it mobilizes financial resources. In the secondary market, these resources are redistributed, and even more than once.
If through the primary turnover, the reproduction process is mainly financed, then on the stock exchange, with the help of buying up shares, the formation and shuffling of control between various financial groups take place.
On the over-the-counter, there is a purchase and sale of securities that for some reason are not listed on the stock exchange (for example, through banks).
Quotation – determination of the exchange rate (market price) of a security or currency.
security paper - a paper confirming the equity participation in the capital of a joint-stock company or the fact of a loan of funds and providing the owner with a certain income.
Derivative papers
Debentures
Equity papers
Bonds
Financial futures
Certificates
Private checks
Equity Central Bank - a share confirming the holder's share in real property and ensuring the receipt of a dividend for an unlimited time.
Dividend - part of the distributed profit of a joint-stock company, attributable to one share.
They represent the direct share of the holder in real property and provide an unlimited time for receiving a dividend.
Shares certify the owner's right to a share in the JSC's own funds. The issue of shares is a way to create a joint-stock company, buy out a state (municipal) enterprise, increase the company's authorized capital.
The share makes its holder the owner of a part of the JSC's property, its co-owner.
Debt Central Bank - an obligation to pay the amount of debt on a certain date in the future, ensuring the receipt of interest at a frequency specified in the terms of the loan, until the maturity of the paper.
They have a fixed interest rate and are an obligation to repay the capital amount of the debt at a certain date in the future.
Debt obligations include bonds, government loans, deposit and savings certificates of banks, bills of exchange. The issuer of bonds and other debt obligations must repay the loan within a certain period of time, and interest that remains unchanged or varies slightly. Interest is paid in equal portions throughout the entire term of the loan (for bonds) or at a time when the paper (certificate) is redeemed.
Bond– Central Bank, which confirms the fact of granting a loan to the issuer and provides the owner with a regular receipt of a fixed income, and upon redemption of the security - the loan amount, as a rule, equal to the nominal price of the security.
Unlike stock dividends, which vary widely or may not be paid at all, bond interest remains constant or changes slightly. Therefore, bonds are fixed-income securities, or hard-income securities. When buying a share, the investor becomes one of the owners of the company that issued it. By purchasing a bond, an investor acquires the status of a creditor. Interest on bonds is paid at least once a year on time, regardless of the profit and financial condition of the issuing company.
Bond(lat. obligatio- an obligation; English bond- long-term, note- receipt) - issuance debt security, the owner of which has the right to receive from the issuer of bonds within a specified period of time its face value in money or in the form of other property equivalent. Also, a bond may provide for the right of the owner (holder) to receive a percentage (coupon) of its face value or other property rights.
The total income on a bond is the amount of interest (coupons) paid and the amount of the discount upon purchase.
Bonds serve as an additional source of funds for the issuer, being the equivalent of a loan. Sometimes their release is targeted - to finance specific programs or facilities, the income from which later serves as a source for paying income on bonds.
The economic essence of bonds is very similar to lending. Bonds allow you to plan both the level of costs for the issuer and the level of income for the buyer, but do not require collateral and simplify the procedure for transferring the right to claim to a new creditor. In fact, medium- and long-term borrowings are carried out in the bond market, usually for a period of 1 to 30 years.
Coupon- a cut-off part of bonds or other securities (loans) of a certain denomination or payment period. The coupon is cut off or torn off when interest is paid or the bond is redeemed by the bank.
A coupon bond is a type of bond with intermediate (coupon) payments that do not reduce its face value. The issuer of bonds pays income to its holders.
Coupon rate (coupon interest rate) of a bond is the annual interest rate on the face value of the payment on the bond. This is the rate of interest paid by the issuer of a bond issue to the owner of the bond.
In addition to the coupon rate, there are other ways to generate income on a bond. So, bonds with a zero coupon rate provide for the payment of income in the form of the difference between the placement (issue) price of the bond and the par value (redemption price). Since such bonds are placed at a discount to face value, they are called discount bonds.
The name "coupon" historically goes back to the tradition of issuing documentary bonds, the obligation of the issuer of which was fixed in the bond certificate. Possession of a certificate of a documentary bond legitimized the person entitled to the bond. If the bond provided for several periods of payment of interest income, the coupons corresponding to each payment were printed directly on the bond certificate. Upon the due date for the payment of the next interest income and the presentation of the bond, the person liable under the bond cut off the corresponding coupon from the certificate (hence the phrase “cut coupons”) and made the payment of income
Certificate– a written certificate of the issuer on the deposit in his name of funds. Only a bank can be the issuer of the certificate. The contributor of funds or his successor is called beneficiary.
Unlike bonds, which have a loan term of up to 30 years, a certificate is a short-term debt obligation. This important advantage of certificates makes them very attractive in inflationary conditions for investors who do not want to numb their funds in illiquid securities for a long time in the face of a constant rise in prices. Short-term, feasibility, high level of profitability, comparable to the rate of inflation, allows the beneficiary, if not to increase capital, then at least keep it at the same level.
There are two types of certificates:
Deposit;
savings.
Deposit certificate – the obligation of the bank to pay back the deposits placed with it; savings certificate - the obligation of the bank to pay out the savings deposits placed with it.
Only legal entities registered in the territory of the Russian Federation or another state can act as a beneficiary of a certificate of deposit.
The form of payment for the purchase and sale of certificates of deposit, as well as payments under these documents, is only non-cash.
Savings certificate depositors are natural persons. Savings certificate funds are paid in cash. The term of circulation of a savings certificate may exceed one year and is limited to three years. If the deadline for receiving a deposit or a deposit under a certificate is overdue, according to such a certificate, the bank is obliged to pay the amount indicated in it immediately upon first demand. Urgent certificates are revocable and irrevocable. If the holder of the security requires the return of the deposited funds before the established date, he is paid a reduced interest, the level of which is determined on a contractual basis when making a deposit or deposit.
It should be noted that with CB certificates, issued to the owners of securities instead of shares or bonds are not securities. Such certificates act as evidence of the purchase of securities by a certain person and contain data on which securities, in what quantity, at what price and for what amount the owner bought them.
Promissory note - this is an unconditional written promissory note of a strictly statutory form, giving its owner (the holder of a bill of exchange) an indisputable right to demand from the debtor the payment of the sum of money indicated in the bill upon maturity.
Central Bank derivative - a paper that secures the owner's right to buy or sell shares and debt obligations.
Derivatives of the Central Bank consolidate the right of their owner to buy or sell shares and debt obligations.
Option – A security that confirms the owner's right to buy or sell a certain underlying asset at a fixed price after some time.
financial futures - a contract to buy or sell a certain underlying asset in the future at a fixed price after some time.
Unlike an option, a futures contract is not a right, like an option, but an obligation: You can refuse to buy or sell an option, but the contract cannot be terminated.
There are forward contracts. In a forward contract, the parties at the time of the transaction must agree among themselves all the necessary conditions of the contract and a specific asset - the subject of the contract, its quality, the size of the contract, the contractual execution price (delivery price), the delivery time and place.
forward contract usually concluded off the exchange for the actual sale or purchase of the relevant asset. It is also possible to conclude a contract for the purpose of insurance (hedging) against a possible adverse price change or for the purpose of playing on the difference in the market value of an asset.
The subject of an agreement on forward contracts can be various assets: industrial goods, securities, currency, precious metals, and so on.
Forward contracts are often concluded with the aim of playing on the difference in the market value of the selected asset. The person holding the short position (the seller) expects the market price of the asset to fall. The person holding the long position (the buyer) is hoping for further increases in the market price of the asset underlying the contract.
As already mentioned, the secondary market for forward contracts is underdeveloped, however, situations are possible in which transactions in the secondary market become profitable and then the contract itself acquires a certain price. This price is determined depending on various factors, including the return on assets.
Features of domestic privatization gave rise to such a central bank as the privatization check or voucher.
Check I is a state certificate of the right of its owner to a share in the gratuitously distributed state and municipal property.
The process of investing money in stocks, bonds, other securities, as well as equity participation in other enterprises is called financial investment , or an investment. Persons who invest in assets - investors, and faces. issuing (issuing) securities - issuers. In the assets of enterprises, long-term (more than a year) and short-term (up to a year) financial investments are distinguished.
Primary and secondary markets exist in organized and unorganized forms. Organized Market Represented stock exchange, which is subject to strict rules for trading in securities.
The unorganized market (street, over-the-counter, telephone) market does not have strict rules for buying and selling. It is represented by disparate intermediaries negotiating a deal in person, by telephone and other communication channels.
Stock Exchange - an organization whose exclusive subject of activity is operations with securities.
The stock exchange acts as a regulator of the market economy.
Exchange rates, gold prices, rates of government debt and shares of the largest, medium and small companies are set on the exchange. The stock exchange determines the financial position of individual firms and even entire industries, the state of the economy as a whole. The fall in market prices for the shares of a company means a deterioration in the financial position of the company, a decrease in its prestige. Conversely, an increase in share prices is a consequence of an increase in a company's rating.
The history of domestic stock exchanges began in 1990, when the Moscow International Stock Exchange and the Moscow Central Stock Exchange were established.
Gathering market participants in one room, the exchange takes into account supply and demand, compares them. Therefore, the exchange dramatically increases the liquidity of securities, the possibility of their rapid sale in order to obtain cash.
AT Russian stock exchange is created as a legal entity in the form of a closed joint stock company. The closeness of the exchange means that stock exchange shares are not subject to open sale on the secondary market, they can be transferred from one shareholder to another only with the consent of the majority of the remaining shareholders. The exclusive subject of activity of the stock exchange is operations with securities, namely:
ensuring the necessary conditions for the circulation of financial assets;
determination of market prices, i.e. quotation;
publication of market prices;
maintaining the professionalism of market participants.
Intermediaries in the market of financial assets are brokers, investment dealers, traders.
Broker(aka a stockbroker, commission agent, courtier, stockbroker) - a person who makes transactions for the purchase and sale of securities on behalf of a client and at his expense. The reward received by the broker is called courtage and is expressed as a percentage of the transaction amount.
Investment Dealer buys securities in his own name and at his own expense for the purpose of reselling for profit.
In the Russian market, the functions of a broker are performed by a financial intermediary, and the functions of a dealer are performed by an investment company.
A representative of a brokerage firm on the floor of a stock exchange is called trader.
For professional participants in the financial asset market, there are special terms: "bears", "bulls", "hares".
"Bear" is playing for a decrease in the market price of the paper. Anticipating a fall in prices, he borrows paper for a certain period of time with payment at the current rate. Securities are immediately sold, until the price for them has fallen. At the time of repayment with the creditor, the securities fall in price, and at this reduced rate, the "bear" repays the debt for the borrowed papers, having income in the form of a difference. selling prices and prices at the time of payment of the debt. The lender also benefits: the papers are not dead weight, but are turned into cash.
"Bull" buys paper for cash and waits for price increases. With a significant increase in the rate of paper, they are sold, and the “bull” has income.
"Hare" is an intermediary trading in securities on an unorganized market that do not have official registration and a fixed price. At its own risk, "Hare" buys and sells securities of little-known, and even dubious firms. "Hares" are historically the first intermediaries in the securities market, which arose as a "street market" when transactions were made on the street.