Gold Business Information

About Gold

| Characteristics of Gold | Supply and Demand for Gold | Gold's International Market and Gold Prices |
| Factors Influencing Gold Prices | Price Trends |

Gold’s International Market and Gold Prices

Gold Market

Gold is traded globally 24 hours a day, just like foreign exchange markets. The major markets for gold are located in London, New York, Tokyo, Hong Kong, and Zurich, but the price of gold always changes as it is constantly traded around the world.

The London market attracts the largest gold volume, with the daily traded amount reaching approximately 500 to 1000 tons. It is a traditional market founded in 1666, where five major bullion dealers*, the so-called *Five Gold Fixing members, gather to set the price of gold in the morning of weekdays. This price acts as the indicator of global gold prices.

The New York market has the second-largest gold trading volume. It is drawing increasing attention as New York is a financial center, focusing on futures transactions. Prices determined in New York have a huge impact on trading at the Tokyo market, which is the next market for gold trading.

The Tokyo market features a mix of spots and futures.

On August 10th, 2007, Gold exchange-traded funds, which are non-equity financial products, were listed on the Osaka Securities Exchange for the first time in Japan. However, since the OSE-listed Gold ETF products were designed to invest in securities that were linked to gold prices, they were not exchangeable for spot gold.

However, on July 30th, 2008, gold exchange-traded products, which are exchangeable for spot gold, were listed on the Tokyo Securities Exchange for the first time in Japan. They have been increasingly attracting attention as physically backed ETF products
* Scotia Mocatta, Barclays Capital, Deutche Bank, HSBC, Société Générale

Gold Price

Gold is traded in US dollars per troy ounce. A troy ounce is a unit used only for precious metals. One troy ounce equals 31.1035 grams. It is written as TOZ and is frequently called an “ounce” for short, but bear in mind that an “ounce” for precious metals is different from a normal ounce, with the latter being 28.35 grams per ounce. Therefore, if you see a headline “Gold tops $350,” it refers to a dollar-based price per troy ounce.

In contrast, when a headline says “Gold price tops \1300,” it is talking about the gold price in yen per gram. The gold price in dollars is converted into yen based on the prevailing exchange rate and then the yen price per troy ounce is converted into a price per gram.

Therefore, domestic(Japanese) gold prices are highly susceptible to trends in foreign exchange markets. Assume that the dollar-denominated international price remains unchanged, the domestic gold price drops when the yen appreciates against the US dollar or rises when the yen depreciates.