Gold’s amazing comeback

Passed $1,000 mark for first time in 2008

By David L. Ganz

GOLD’S amazing 2008 comeback stumbled Aug. 15 as the precious metal dropped below $800 an ounce for the first time this year, completing a slide that had begun five months earlier on March 17 when the London daily fix topped out at $1,023.50, silver weighed in at $20.92, and platinum was at exactly $2,000 an ounce. Gold currently rests slightly above $800, at $803.

The London Fix, since 1919, has governed gold transactions. Current members of the Fix are: The Bank of Nova Scotia - Scotia Mocatta; HSBC (formerly Hong Kong Shanghai Bank Corp.); Deutsche Bank AG London; Societe Generale Corporate & Investment Banking, and Barclays Capital.

The procedure followed by the five member firms is designed to fix a price for settling contracts between members of the London bullion market. The fix takes place twice a day, and is now done by telephone at 10:30 a.m. and 3 p.m. local (London) Greenwich mean time.

First fix took place on Sept. 12, 1919, amongst the five principal gold bullion traders and refiners of the day: N.M. Rothschild & Sons, Mocatta & Goldsmid, Pixley & Abell, Samuel Montagu & Co. and Sharps Wilkins. The gold price then was £ 4 18s 9p, ( 4 pounds, 18 shillings and 9 pence (GBP 4.9375) per troy ounce or about $24 an ounce. The official price was still $23.67 an ounce.

Today, gold prices are fixed in United States dollars, pound sterling and European euros. Originally, the offices of N.M. Rothschild & Sons in St. Swithin’s Lane were used for a table side meeting of five competitors; but since May 5, 2004, it has been done by phone. In April, 2004, Rothschild withdrew from gold trading and Barclays Bank took its place.

At the Rothschild board room, participants could raise a small Union flag on their desk to pause proceedings. With the telephone fixing system, participants can sill register a pause by saying the word “flag.” A rotating chairman ends the meeting with the phrase: “There are no flags, and we’re fixed.”

Gold American Fix 2008

The price of gold on the American Fix has fluctuated greatly in 2008.

Price of Gold 1837 to 2008

1837

1838

1839

1840

1841

1842

1843

1844

1845

1846

1847

1848

1849

1850

1851

1852

1853

1854

1855

1856

1857

1858

1859

1860

1861

1862

1863

1864

1865

1866

1867

1868

1869

1870

1871

1872

1873

1874

1875

1876

1877

1878

1879

$21.60

$20.73

$20.73

$20.73

$20.67

$20.69

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.71

$20.67

$20.67

$20.67

$20.67

$27.54

$31.39

$46.36

$29.90

$27.49

$27.59

$27.83

$24.73

$22.89

$22.53

$23.15

$22.79

$23.12

$23.33

$22.12

$21.24

$20.67

$20.67

1880

1881

1882

1883

1884

1885

1886

1887

1888

1889

1890

1891

1892

1893

1894

1895

1896

1897

1898

1899

1900

1901

1902

1903

1904

1905

1906

1907

1908

1909

1910

1911

1912

1913

1914

1915

1916

1917

1918

1919

1920

1921

1922

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

1923

1924

1925

1926

1927

1928

1929

1930

1931

1932

1933

1934

1935

1936

1937

1938

1939

1940

1941

1942

1943

1944

1945

1946

1947

1948

1949

1950

1951

1952

1953

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$20.67

$32.32

$35.00

$35.00

$35.00

$35.00

$35.00

$35.00

$34.50

$35.50

$35.50

$36.50

$36.25

$37.25

$38.25

$43.00

$42.00

$40.50

$40.25

$40.00

$38.70

$35.50

$35.25

$35.15

$35.20

$35.25

$35.25

$35.25

$36.50

$35.50

$35.35

$35.25

$35.35

$35.50

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$35.40

$35.50

$43.50

$35.40

$37.60

$43.80

$65.20

$114.50

$195.20

$150.80

$145.10

$179.20

$244.90

$578.70

$641.20

$430.80

$484.50

$415.00

$331.30

$354.20

$435.20

$522.90

$441.00

$433.40

$423.80

$379.90

$356.30

$419.20

$409.80

$385.60

$367.80

$288.80

$288.00

$287.50

$272.15

$278.70

$346.70

$414.80

$438.10

$517.20

$636.30

$833.20

$901.00

The price of gold on the American Fix has fluctuated greatly in 2008.

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COINSJANUARY2009