Facts about the precious metal .. Gold between the trade of love and fear
Mohammed Bencasim - Al Jazeera Net
After years of decline following the global economic crisis in 2009, gold has risen in recent months to touch the highest price levels in six years, for many reasons, notably the escalating fears of trade war between the world's largest economists, America and China.
The rise in the precious metal has also contributed to the effects of a number of political upheavals in different parts of the world, such as Britain's exit from the European Union, and tensions between America and Iran, in addition to the US interest rate cut that pushed the dollar to decline.
The price of gold is currently about $ 1561 an ounce.
All these factors and others have prompted investors in the world to increase their purchases of gold in search of a safe haven for their money, and to reap the return of bonds and stocks, but the yellow metal historically subject to two major factors determine the size of demand from various parties, whether ordinary people or central banks and investment companies and others , Namely: the love trade and the fear trade.
The "love trade" is reflected in the desire of people from the old to own the yellow metal to save their savings in anticipation of difficult times, or to gift it in the form of jewelry and jewelry for the wife, relatives and friends on social occasions such as marriage and birth.
Gold demand in the world's two most populous countries (China and India) accounts for nearly half of the world's annual consumption of precious metal.
In addition to their human weight, China and India are known to hold celebrations and festivals in certain months, which are occasions for the purchase of gold in large quantities, most notably the marriage season in India, events that do not take place without the presence of gold, and held annually in that Asian country 20 million marriages.
|Goldsmith in Baghdad's gold market (Reuters)|
According to the London Bullion Market Association, gold each year sees rises in certain months: January (more than 3%), August and November (more than 2%), due to this period. From major religious festivals in China and India, such as the Chinese Year celebrations (in January), the Diwali festival in India (November), as well as the summer wedding season (August).
At these social events and festivals, large numbers of Indians and Chinese are willing to buy gold for marriage, and because it is also a storehouse of savings and a means of financial security, especially by women, widows and Bawadi residents in India, where the precious metal comes second - after oil - One of India's largest import bill items.
This fundamental factor that determines the levels of demand for gold, and thus significantly affects world prices, is the behavior of individuals in a number of advanced industrial countries such as America, Germany and Japan, where people are tempted to buy gold as a hedge against the deterioration of economic conditions, including the depreciation of local currencies , Worsening inflation and falling property prices.
In addition, traders in international markets are worried about the political turmoil, trade wars and the loss of attractiveness of government bonds and shares of listed companies, which pushes gold as a safe haven in times of uncertainty and uncertainty in the global political situation.
|The precious metal has historically been known as a means of saving and hedging against the vagaries of the situation (Reuters)|
Where to consume?
The jewelery and jewelery industry consumes more than half of what is pumped into the international markets of gold (52% or 2233 tons), followed by bullion and gold coins (27% or 1177 tons) and the technology sector (9% or about 384 tons) as the use of precious metal in industries Nanotechnology and electronic devices such as computers, mobile phones and medical applications, because it is a highly efficient conductor of energy.
In the fourth place in terms of absorption of gold supplies, we find central banks (8% by 341 tons), then investment funds in gold, futures, and other forms of trading in the markets (3% by about 147 tons).
Gold has several different caliber measures that measure the concentration of the yellow metal in it:
1. 24k yellow gold: pure gold that is not tainted by any other metal.
2. 22k yellow gold: 91.7% gold, 5% silver, 2% copper and 1.3% zinc.
3- 18K Yellow Gold: 75% Gold, 15% Silver and 10% Copper.
4 - 14k yellow gold: 58.3% gold, 30% silver, 11.7% copper.
5- 10k yellow gold: 41.7% gold, 52% silver, 6.3% copper.
6- 9k yellow gold: 37.5% gold, 42.5% silver, 20% copper.
|One of the traditional gold mining workshops in the Nile River state in northern Sudan (Reuters)|
China: 404 tons (12% of world production)
Australia: 315 tons
Russia: 297 tons
United States: 221 tons
Canada: 189 tons.
Sudan is the largest Arab country and the third largest African country in terms of gold production, with a production of about 76 tons in 2018, followed by the continent of Ghana with 130 tons, then South Africa with 129 tons. Egypt occupies the second place in the Arab world in the production of precious metal with 14.7 tons.
The biggest consumers
China: 984 tons per year.
India: 849 tons per year.
United States: 193 tons per year.
Germany: 124 per year.
Thailand: 90 tons.
Supply and demand
The average annual supply of gold markets in the world between 2008 and 2017 amounted to about 4306 tons, and gold mines took the lion's share in securing these supplies by 67%, followed by the amounts of gold extracted from recycling operations by 33%.
The average global demand for gold between 2008 and 2017 was about 4,282 tons.
The precious metal trade in gold exchanges around the world is valued at $ 112 billion a day. The largest stock exchanges are in London and then in New York. The rest are trading on gold exchanges in Shanghai, Zurich, Moscow, Tokyo, Dubai and Istanbul.