The world’s largest gold market, the so-called professional gold market, is known as ‘OTC’ (Over The Counter, also: off-exchange trading). Here, gold buyers and gold sellers themselves decide with whom they want to trade. They then trade directly with each other instead of through an exchange. Business is mainly done over the phone. With every single gold trade, a specific gold price and a traded amount are agreed. Gold brokers can name any gold price, and the customer (buyer or seller) can then decide whether or not to accept the gold price mentioned. This is completely different from buying a gold coin from a coin dealer or buying equities through a single exchange like the Frankfurt Stock Exchange.
In OTC transactions, only the so-called Good Delivery gold bars are traded, which are usually delivered two working days after purchase. These gold bars weigh 400 ounces (approximately 12.44 kilos) and their shape is strictly determined by the London Bullion Market Association. Nothing is as strictly standardised on the gold market as the high quality of these gold bars. Due to the structure of this market, there is no uniform gold price worldwide.
The advantage of trading on this market: You pay no or at most a small surcharge for officially recognised Good Delivery bars. Unless the buyer not only wants to acquire the property, but actually takes possession of the gold and does not want it to be stored in a vault recognised by the London Bullion Market Association (LBMA).