A regular issue in the gold market is what influences the price of the precious metal. Most people rationally believe that supply and demand statistics in the physical gold market will determine the price.

The fact is that futures market in New York is the largest place in the world where more gold contracts are traded than any other place. In almost all cases the price at which the physical gold changes hand depends on the price bid in New York exchange. Almost all bullion and gold coin dealers set the price of their transactions on the price traded in NYE therefore, the supply and demand at the NY exchange is probably the single most important factor (short term) in determining the forecast of gold price. We can see huge changes in the supply and demand in the physical market, but if the price does not first change at the exchange it is not likely to change the price of the gold in the international markets.