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How Gold is Priced
Like other precious metals, gold is measured by troy weight and by grams. When it is
alloyed with other metals the term carat or karat is used to indicate the amount of gold
present, with 24 carats being pure gold and lower ratings proportionally less. The purity
of a gold bar or coin can also be expressed as a decimal figure ranging from 0 to 1, known
as the millesimal fineness, such as 0.995 being very pure.
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The price of gold is determined through trading in the gold and derivatives markets,
but a procedure known as the Gold Fixing in London, originating in September 1919,
provides a daily benchmark price to the industry. The afternoon fixing was introduced
in 1968 to provide a price when US markets are open.
Since April 2001 the gold price has more than tripled in value against the
US dollar, prompting speculation that this long secular bear market has
ended and a bull market has returned.
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