Like other precious metals, 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 present, with 24 karats being pure and lower ratings proportionally less. The purity of a bar 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.
The price of is determined on the open market, but a procedure known as the Fixing in London, originating in September 1919, provides a daily benchmark figure to the industry. The afternoon fixing appeared in 1968 to fix a price when US markets are open.
The high price of is due to its rare amount. Only three parts out of every billion (0.000000003) in the Earth's crust is .
Historically was used to back currency; in an economic system known as the standard, a certain weight of was given the name of a unit of currency. For a long period, the United States government set the value of the US dollar so that one troy ounce was equal to $20.67 ($664.56/kg), but in 1934 the dollar was revalued to $35.00 per troy ounce ($1125.27/kg). By 1961 it was becoming hard to maintain this price, and a pool of US and European banks agreed to manipulate the market to prevent further currency devaluation against increased demand.
On 17 March 1968, economic circumstances caused the collapse of the pool, and a two-tiered pricing scheme was established whereby was still used to settle international accounts at the old $35.00 per troy ounce ($1.13/g) but the price of on the private market was allowed to fluctuate; this two-tiered pricing system was abandoned in 1975 when the price of was left to find its free-market level. Central banks still hold historical reserves as a store of value although the level has generally been declining. The largest depository in the world is that of the U.S. Federal Reserve Bank in New York, which holds about 3% of the ever mined, as does the similarly-laden U.S. Bullion Depository at Fort Knox.
Since 1968 the price of on the open market has ranged widely, with a record high of $850/oz ($27,300/kg) on 21 January 1980, to a low of $252.90/oz ($8,131/kg) on 21 June 1999 (London Fixing).[10] On 11 May 2006 the London fixing was $715.50/oz ($23,006/kg).[11]
In 2005 the World Council estimated total global supply to be 3,859 tonnes and demand to be 3,754 tonnes, giving a surplus of 105 tonnes.
(Source : wikipedia.org)
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