The world lives fast every day, which means it is changing. Even now in times of pandemic, it works as if nothing can stop it. Businesses continue to function, even though it is a crisis, they have to work, the economy, although on fragile feet, continues to function. The crisis is an obstacle, but we must not allow it to limit our functioning. Sometimes it is the crisis that dictates events. She is sometimes to blame for the events in the country, and sometimes she is to blame for the course of events in the economy, finance, and politics.
Instability can often shake the prices of products and services. So often the prices of goods change under the pressure of crisis situations that occur globally or locally. Prices are always the first to change the flour, sugar, cooking oil, bread, and in this covid crisis, for example, the prices of medicines, masks, fruits, and vitamin supplements have also changed. What about other products? Does this crisis affect them as well? Of course, it works. The crisis, regardless of its nature, affects all possible conditions, decisions, and prices.
Changes are also found in the most valuable raw materials in the world, such as oil, gold, silver, and other raw materials that are often stored as reserves. These raw materials are kept as reserves by the countries that are further used in such crises so that a balance can be struck if there is an imbalance in payments, budget, etc. Gold and silver are specially included in those reserves, especially those made by a country’s national banks. But how are their prices formed? How are the prices of valuable raw materials such as gold and silver formed? What affects them? We bring you the answers in the continuation of this article, follow us to the end.
What exactly are gold and silver?
These are two types of metals that in the periodic table are marked with the marks Au (gold) and Ag (silver). In the past, gold was extracted from the fine sand of rivers around the world and as such was then produced. Today, unlike before, a different way of production is used, ie gold is mined in the mines or found in a form together with silver. Gold can be found in northern Europe, Asia, Africa, and parts of America. Silver, on the other hand, is a metal that is most commonly used to make jewelry, and it is often used in electronics. It is mined in the mines and is easier to process than gold. These two precious metals are very useful, and above all, they are very valuable and their price is determined in a unified way.
How is the price of gold and silver formed?
Gold and silver are precious metals that every country in the world has, but these metals are also used to make valuable items, jewelry, and insignia that citizens have despite the prices. The prices of these metals are determined centrally. They decide on their placement on the London Stock Exchange, where the banks from London make bids in two terms every day through bidding, and the one that will be unique will be the new price of these metals – say from goldpricez.com, an expert site that has been dealing for many years. with this topic and with expert reviews on topics related to silver and gold. Furthermore, when they are adopted, the prices are expressed in pounds, euros, and dollars and are placed publicly for everyone to be informed about their change or their confirmation if the price remains the same.
Are there any external factors affecting the prices of gold and silver?
As already mentioned, prices are set at the central level and are decided in the capital of the United Kingdom – London. On the London Stock Exchange, the prices of these two valuable raw materials are decided in two terms every day. But their price can always have a certain impact. Price formation can be affected by war, economic crises, pandemics, world wars, and many other unpredictable natural situations that can enormously increase or decrease prices. Impacts are often unexpected for price-makers themselves, so they often come as a shock to the world.
Why are gold and silver reserves important in countries?
State reserves are often the topic of conversation. They are often discussed in terms of which country has them in what quantity and what is the total value. But why? Many people do not understand that, and we are here to explain. The state reserves consist of gold, silver, precious stones, and oil. They are made for crises when countries can not pay for something or manage something, so they sell some of those reserves. These reserves express the power of the system in a possible crisis. Countries need to have such reserves, and they must be made of silver and gold. This is of great importance because, in a crisis, quality silver and gold are the first to be sold in order to be able to calm the situation and be able to respond to the crisis.
Rule 75-25 for home savings
There is also a rule that applies to homes and home savings. That rule is better known as Rule 75-25. This rule is presented as an excellent mechanism for making a reserve in a household. The reserve should cover 75% gold and 25% silver, which would mean 100% excellent reserve for crisis times. These savings are usually kept in the safes of the banks where they are safest. It would be nice if you could make such a reserve, which regardless of the value would be a great source for unwanted times of crisis. Think about it and approach its formation.
The price of any product is not eternal, so it applies to these two precious metals. We have seen how important they are and how often it is decided on their price and whether it should be changed. We have added some additional information and additions on the topic to make things clearer and more interesting for you. And we have given you a great suggestion with a rule that economists know and share with everyone, so make a change in your savings and reserves that would be the basis for monitoring the prices on the London Stock Exchange.