“Only labour can create wealth – gold is condensed labour”
from In Gold We Trust:
Now that we have seen how spot gold is priced “loco London,” we can examine how other local markets, and other types of gold contracts, are priced in reference to the London spot market. This includes other spot delivery locations, gold forward and futures contracts — such as the gold futures contract at the NYMEX in New York — and gold swaps, forward rate agreements, and options. (In 1994 the COMEX merged with the NYMEX, and the principal gold futures contract now trades there.)
London is only one of many important centers for gold trading. The second principal center for spot or physical gold trading, for example, is Zurich. For eight hours a day, trading occurs simultaneously in London and Zurich — with Zurich normally opening, and closing, an hour earlier than London. During these hours Zurich closely rivals London in its influence over the spot price, because of the importance of the three major Swiss banks — Credit Suisse, Swiss Bank Corporation, and Union Bank of Switzerland — in the physical gold market. Each of these banks has long maintained its own refinery, often taking physical delivery of gold and processing it for other regional markets.
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