As is known, in recent years, gold has largely lost its main purpose of equivalent wealth. In particular, the central banks of many countries now prefer to transfer gold reserves in sovereign bonds. However, paper trading, but the drop in stock market prices, a weak dollar, terrorism and war have raised interest in the precious metal.
Gold changing to paper Mankind has a very long time gold as decoration and is likely to be used for a long time. Also, gold has long played an important role in the global economy - with different people, it served as the modern equivalent of money. Later, with the advent of money, people used gold as an object of savings. States created the gold reserves. Gradually, however, the value of gold has fallen markedly. Over the last decade of XX century, its price has fallen by 29%, while the stock index Dow Jones Industrial Average rose by 439%. But with the advent of the new millennium, interest in gold has risen. Consequently, the price of metal goes up. In the past year has been the largest since 1979, an increase in the value of gold, which is associated with falling stock market prices, weak dollar, terrorism, and the expectation of war in Iraq. In this environment, investors are hoping not so much to get return on invested capital as a return of capital itself. Although the rank and file players interested in gold, their role in shaping its prices low. In this market there is much more significant players. For example, hedge funds, whose role in raising the price of "gold" futures is considered the primary.
If we talk only on the amount of the purchase of gold, the most significant source of demand for it, according to the World Council of gold are jewelers. Their demand is sensitive to higher metal prices. While the first 9 months of last year the price of "gold" futures rose 16%, global demand for metal from the jewelry fell by 13.2% compared with the previous year.
On the supply side of gold, the central banks of many countries in recent decades, are selling their gold reserves in favor of the sovereign bonds. It is highly likely that this trend will continue. At the proposal of gold, of course, influenced by gold mining companies. Last year, world production fell by 2.3% compared to 2001 According to the information monitors offer gold Gold Fields Mineral Services Ltd., This is the first since 1995, falling production.
With the increase in metal prices gold mining companies have ceased to enter into forward contracts on future products to protect against changes in gold prices. This should support them in the first half of this year.
The Discreet Charm of the investor Despite the modest impact of ordinary investors in the pricing of gold, they demand from time to time becomes noticeable. For example, in the U.S. happened in 1998 and 1999. When increased demand for gold coins due to concerns over the problem of year 2000. However, the demand for coins has not affected the price of "gold" futures in this period.
Gold prices rose sharply in 1999 but this was associated with the decision of the central banks of 15 European countries to restrict the sale of gold from their reserves of 400 tons per year until 2004, this step would prevent the impairment of central bank reserves, because in that time the price of gold fell to $ 250 per ounce. After the year 2000 passed quietly dropped and the demand for gold coins, and the price of gold. But last year, despite falling sales of gold coins in the U.S., the price went up sharply. In January this year, demand for gold coins in America has increased 10 times compared to January 2002 with up to half the buyers bought gold coins for the first time. There is a possibility that if war with Iraq will end quickly and successfully for the U.S., the gold price falls dramatically, at least at first. Stock Quotes gold mining companies already reflect this possibility. Index of the 11 flagships of the industry declined in the current year is already at 2.9% after rising 41% in 2002, however, there are arguments in favor of higher prices for gold. It is usually used as insurance against inflation, but proponents believe the yellow metal, it can be useful in the opposite situation, ie, deflation, when the gold can maintain its value, unlike other assets. It can rise in price due to political tensions, a weak dollar and the slow recovery of world economy. In this case, most likely, the price of gold in 2003 will grow more rapidly than the cost of precious metals like silver and platinum. In the long run, yet difficult to expect that gold will regain the importance it had in the past.
Gold changing to paper Mankind has a very long time gold as decoration and is likely to be used for a long time. Also, gold has long played an important role in the global economy - with different people, it served as the modern equivalent of money. Later, with the advent of money, people used gold as an object of savings. States created the gold reserves. Gradually, however, the value of gold has fallen markedly. Over the last decade of XX century, its price has fallen by 29%, while the stock index Dow Jones Industrial Average rose by 439%. But with the advent of the new millennium, interest in gold has risen. Consequently, the price of metal goes up. In the past year has been the largest since 1979, an increase in the value of gold, which is associated with falling stock market prices, weak dollar, terrorism, and the expectation of war in Iraq. In this environment, investors are hoping not so much to get return on invested capital as a return of capital itself. Although the rank and file players interested in gold, their role in shaping its prices low. In this market there is much more significant players. For example, hedge funds, whose role in raising the price of "gold" futures is considered the primary.
If we talk only on the amount of the purchase of gold, the most significant source of demand for it, according to the World Council of gold are jewelers. Their demand is sensitive to higher metal prices. While the first 9 months of last year the price of "gold" futures rose 16%, global demand for metal from the jewelry fell by 13.2% compared with the previous year.
On the supply side of gold, the central banks of many countries in recent decades, are selling their gold reserves in favor of the sovereign bonds. It is highly likely that this trend will continue. At the proposal of gold, of course, influenced by gold mining companies. Last year, world production fell by 2.3% compared to 2001 According to the information monitors offer gold Gold Fields Mineral Services Ltd., This is the first since 1995, falling production.
With the increase in metal prices gold mining companies have ceased to enter into forward contracts on future products to protect against changes in gold prices. This should support them in the first half of this year.
The Discreet Charm of the investor Despite the modest impact of ordinary investors in the pricing of gold, they demand from time to time becomes noticeable. For example, in the U.S. happened in 1998 and 1999. When increased demand for gold coins due to concerns over the problem of year 2000. However, the demand for coins has not affected the price of "gold" futures in this period.
Gold prices rose sharply in 1999 but this was associated with the decision of the central banks of 15 European countries to restrict the sale of gold from their reserves of 400 tons per year until 2004, this step would prevent the impairment of central bank reserves, because in that time the price of gold fell to $ 250 per ounce. After the year 2000 passed quietly dropped and the demand for gold coins, and the price of gold. But last year, despite falling sales of gold coins in the U.S., the price went up sharply. In January this year, demand for gold coins in America has increased 10 times compared to January 2002 with up to half the buyers bought gold coins for the first time. There is a possibility that if war with Iraq will end quickly and successfully for the U.S., the gold price falls dramatically, at least at first. Stock Quotes gold mining companies already reflect this possibility. Index of the 11 flagships of the industry declined in the current year is already at 2.9% after rising 41% in 2002, however, there are arguments in favor of higher prices for gold. It is usually used as insurance against inflation, but proponents believe the yellow metal, it can be useful in the opposite situation, ie, deflation, when the gold can maintain its value, unlike other assets. It can rise in price due to political tensions, a weak dollar and the slow recovery of world economy. In this case, most likely, the price of gold in 2003 will grow more rapidly than the cost of precious metals like silver and platinum. In the long run, yet difficult to expect that gold will regain the importance it had in the past.
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