Analyze the rapid development of the gold market

Zheng Lianghao
Mested among all precious metals, only gold has a wide range of global demand foundations. This uniqueness ensures that the international gold market is more active than ever before. The role of gold in our lives is not comparable to any other metal. We may not know or have never thought about it, but we have to contact different forms of gold almost every day. Understanding the extensive use of gold helps to explain the applicability of gold always has the application of gold, and helps us see the trend of gold supply and demand since 2000.
This will clearly explain the driving force of gold supply and demand to help explain why the gold industry has the confidence to make 2010 the beginning of the new gold era.
gold represents different meanings for different people. Gold is a suitable jewelry for consumers who want to purchase valuables or prices that can be afforded; it is a way to reflect wealth or success; it is a special tool for investors to protect or store wealth; it is an electronic conductor, a human beings Exploring important materials for space; it is also applied to the leading nanotechnology, which is used in the medical sector to overcome cancer and disease facilities. All of this shows that gold is the protagonist of some stakeholders' certain decision -making processes. These factors have helped shape the gold demand for the past ten years and ensure the healthy development of the gold industry.
2008 and the rise of gold demand in 2009 have received unprecedented attention from the media. It is necessary to put the nearest number to a longer -term period and acknowledge the role of limited supply. In this way, we can see that the rise in gold prices is not short -term, and the supply is limited because demand has increased for a long time. Looking back at the situation since 2000, it is possible to provide a good case to support the optimistic prospects of gold in 2010.
Since 2000, the World Gold Association and precious metals and mining consulting companies -GFMS have been recording the gold demand and supply data of each quarter, and as an important component of the quarterly report of the "Gold Demand Trends" of the World Gold Association Part of the publication. These data include the supply and demand data of gold jewelry, investment, industry and official departments, and the supply of mining and recycling industries, providing unprecedented reference information for the gold industry. The data and analysis of these reports have unique depth and breadth, covering the supply and demand of various countries, regions and departments.
The comprehensive and authoritative insights on the trend of supply and demand support our views, that is, gold demand will remain strong for a long time. This article will show that regardless of the overall economic situation, gold demand has shown unique flexibility, whether the demand comes from consumers, investors, industrial fields or governments.
1. Total demand level
2008 The total requiring 3753 tons of tonnage gold was required, which was slightly lower than the 3821 tons in 2000. In the period, the demand has remained above 3200 tons, but it floats up and down, reflecting many factors that affect the supply and demand. This article will be detailed later.
The total demand for gold has fluctuated from time to time in the past ten years, but the demand for US dollars has maintained steadily since 2000. In 2000, the total demand that could be confirmed in the US dollar was 34 billion U.S. dollars, an increase of $ 105 billion by 2008. This is mainly due to the rise in gold prices, which in turn also reflects the long -term storage characteristics of gold, as well as its ability to hedge inflation and the ability to fluctuate currency. Gold demand has received quite high media attention, but we should not ignore the important role of gold supply to price -driven.
It's supply, emerging markets such as China and other countries have further increased market supply. Compared with other parts of the world, especially South Africa's mineral output, this developments are very important. Supply and demand balance is an important factor in determining and stable gold prices, and helps further alleviate any possible economic and financial shocks in 2010 and in the future.
2008, due to the collapse of the global financial market and the following worldwide economic recession and depression, the total demand for gold can be increased. With the collapse of the financial market, the government has adopted unprecedented measures to save banks, injecting liquidity to the market, increasing currency supply, and in the field of investment, everyone is seeking a safe and high -quality shelter. Investors' wealth decreased sharply. They were afraid of government stimulus plans to lead to inflation and was also observed by risks and market volatility. They turned to the only assets inspected in the era of economic turmoil -gold. Gold has no risk of trading opponents. It is not a liabilities for anyone and liquidity. These advantages are not only pursued by the central bank, but also the dream of retail and institutional investors.
In the past two years, in the face of the factors that destroy other asset prices, the price of gold has remained stable. From the time of the credit crisis, from June 2007 to June 2009, the value of global stock securities shrank by about 40%when the first signs of uncertain recovery appeared. However, in the same time, gold was one of the few assets of the few rising prices (other main exception assets was government bonds), which rose 42%.
The decrease in individual and national wealth during this period allows investors to find new ways of value preservation, resulting in increased gold demand. This manifestation allows people to recognize the unique wealth guarantee characteristics of gold, and effectively proves the ability of gold for investors and gold jewelry buyers for a long time.
of course, economic recession and high US dollar gold prices and gold prices in various places have also affected consumer consumer confidence and demand for gold jewelry.
2. Gold supply and demand analysis
The new gold demand and supply market and precious metal purposes have appeared in the past ten years. Especially in the past few years, the increase in demand in the Chinese market and the continuous increase in Chinese ore production have also brought an increase in China's gold supply.
The development of global supply and demand changes, in response to the structural changes in China's gold market, the distribution of total demand in different needs has undergone important changes due to time transition. In addition, the high -level gold price of recent US dollars and local currency plans has led to many market commentators and analysts that the overall demand of gold jewelry may be reduced, so that the original protection of gold holders who were originally protected from the economic cycle loss would be exempted from the basic nature of the economic cycle loss. changes happened.
If in the past ten years, although the distribution of demand distribution at the end of 2008 and early 2009 has changed significantly, that is, from jewelry to investing, it is the change in this multi -level demand that has made gold unique elasticity for the economic cycle. Historically, gold jewelry demand is the largest part of the total demand. Since 2000, it can be confirmed that the demand for jewelry in the total demand has an average of 73%, while the investment is 15%and the industry accounts for 12%. In 2000, these ratio was 84%of jewelry, 4%of investment, and 12%of the industry. In 2008, it was 58%of jewelry, 31%of the investment, and 11%of the industry.
Figure 1-1-1 Gold market supply and demand structure
(Data source: GFMS, WGC)
The changes in supply have also occurred in the official department. Over the past 20 years, the central bank has been a net supply party in the private gold market. This time has now passed, and a large number of gold holders (referred to as central banks) in Europe have weakened gold, and emerging countries have become more and more buyers. Like a century ago (between 1845 and 1968), the central bank is likely to become an important department of gold demand again.
The signing party of the "Central Bank's Gold Sales Agreement" is traditionally golden sellers, and most of them have completed their sales plan. At the same time, new sources of demand appear in other countries in the world, especially China, Russia and India.
Igone reviews of jewelry, investment, industry and official departments in the past ten years of changes in the demand for gold, we may see that with the increasing understanding of the characteristics and quality of meticulous demand for gold, how the market will develop in how the market will develop. Meet these needs.
2.1 Gold jewelry requirements
The gold jewelry is very unique. It can not only store value, but also use special emotions and express wishes for a long time. This means that people can buy it as a gift that has been collected for a lifetime and has been passed down from generation to generation, leaving themselves or sending them to others.
2000 Golden jewelry needs 3205 tons, worth 28.75 billion US dollars, and the main markets are India (620.0 tons), the United States (387.3 tons) and China (215.3 tons). By 2008, the total demand for gold jewelry dropped to 2159 tons, but the value of US dollars rose to USD 60.25 billion. Several major gold jewelry market patterns have not changed much, namely India (474.6 tons), China (326.7 tons) and the United States (179.1 tons).
Figure 1-1-2 Gold Demonstration Trend Chart
(Data Source: GFMS, WGC)
Russia as a powerful economy, 2008 gold demand is 94.1 tons, while 2000 It is only 30.6 tons year, which shows that the demand for gold in emerging markets can develop hugely in a short period of time. Recent Chinese market jewelry demand data illustrates the rapid speed of its market development. After a long period of market supervision, the Chinese can finally combine gold with their long culture.
is obvious that the gold jewelry market has developed significantly in the past ten years, and the demand for high -end gold jewelry has appeared in China. The younger generation has eagerly pursued gold. This group of emerging middle class has received good education, excellent work, outstanding ability, and gold brings them the possibility of hugging fashion. As they eagerly express their personal achievements and success, a new consumption demand for gold ornaments has quietly formed, not only showing the trend of demand, but also promoting the development of fashion styles and products.
The high-end and mass markets in the development of emerging markets, such as China, have cultivated new demand trends, including new products and commercial partners, such as K-Gold 18K gold jewelry to become the favorite gold jewelry of the younger generation; The "golden imagination" gold jewelry design contest jointly created by the top designers of the top designers (such as China, India, and South Africa), which is the top designer of the top designers in the World Gold Association (such as China, India, and South Africa), has also played a role in the cultivation of the love of gold in gold.
compared China to India, we can see the diversity of the gold jewelry market. Both countries have the increasingly increasing middle class, and they have the ability to buy gold jewelry frequently. But Indians love gold prefer. Whether it is used as a jewelry or for storing value, it has several cultural traditions. India is currently the world's largest gold jewelry market. The demand for weddings and festivals accounts for a large part of its total demand, which also affects the forecast of jewelry transactions and analysts on the development of the global gold jewelry market.
In 2009, market participants have repeatedly said that the impact of high prices on the demand for consumers' gold jewelry. Most people acknowledge that non -Western gold markets such as India are very sensitive to prices and will avoid sharp rise in prices or fluctuating violent fluctuations, and they are more inclined to buy when prices fall.
As the price rises, gold jewelry will be more and more regarded as high -end products, which may mean that the category of jewelry on sale will change. The rise in gold prices has led to significant changes in consumers in some regions, including India and the Middle East, and they tend to buy smaller and lighter jewelry to meet the tight budget. Nevertheless, the characteristics of golden transmission and storage value of gold mean that consumers will continue to buy even during the period when economic conditions are difficult.
The recent trend of gold jewelry demand should not be viewed in isolation, but should be analyzed from changes in the total demand in the past ten years. Gold prices have risen steadily since 2000 (in the US dollar), which significantly reflects consumers and investors' response to increasing gold prices.
2.2 Investment demand
Investment demand has increased significantly in recent years, exceeding the scope of traditional gold bars and gold coins. The launch of the exchange trading gold fund (ETFS) will increase the total demand for gold investment to 31%of the total demand for gold in 2008, and the total investment demand can be confirmed that the total investment needs of 1158 tons or $ 32.46 billion. In 2000, this number accounted for only 4%of the total demand, and it can be confirmed that the total investment demand is 166 tons or 1.49 billion US dollars.
people often admit the ability of gold preservation and purchasing power, but we must admit that in addition to the holders of the central bank and the "super national" agency (such as the International Monetary Fund, etc.), other investors The understanding of the characteristics and its asset attributes is just a matter of recent years. Sometimes people think that gold is the heritage used to leave to future generations. Now these views have changed, and the instability of the US dollar forces the central bank and institutions to re -examine their assets to be distributed to gold. After all, gold is a key asset that protects the strong currency, resist inflation, default risk and liquidity risks.
Figure 1-1-3 Gold investment demand trend chart
(Data source: GFMS, WGC)
Before the global economic crisis, when macroeconomic conditions were good, investors from traditional investment for example, for example Stocks and bonds, as well as generous returns in the investment of new derivatives, rarely noticed the need to reduce risks and ensure wealth. This crisis exposes the lack of investment strategies for individuals and institutional investors. Now it seems that although many people may try diversified investment before the crisis, in fact, most of the investment portfolios are either their asset distribution is too narrow, or the increase in new asset categories that have not been able to provide expectations. High extra risk.
The investment demand for gold in the past ten years has doubled, which reflects the desire to better guarantee the risk of investing in the investment portfolio to better guarantee wealth.
2.3 Industrial demand
The industrial demand has remained roughly stable in the past ten years, and its total gold demand ratio decreased slightly from 11.8%in 2000 to 11.6%in 2008. In 2007, industrial gold demand accounted for 13%of the total demand. Although the proportion of total demand remained stable, the total industrial demand in 2008 was 436 tons, which was 17.5%higher than the average demand of 371 tons in the same period a decade ago.
The total demand for gold has increased in recent years, and its use is also increasing. Gold cannot be simply considered a personal product, and it also has an important social role. Thanks to the physical and chemical attributes of gold, it has become an excellent material in many innovative industrial applications, such as electronics, medical, energy, and nanotechnology.
. Although there are many new uses to be developed, industrial demand cannot become the main driving force for gold prices. Nevertheless, gold is widely used in semiconductor, mobile phone chips, computer processors, etc., and the market's awareness of its corrosion resistance, high electrical and bonding capabilities is increasing. In the electronics industry, although there are other cheaper choices than gold, gold is still the first choice for the reliability, performance and persistence of materials.
2.4 central bank reserves
Figure 1-1-4 Gold Reserve in the top 20 countries and regions in the world
(data source: WGC)
After the end, a lot of changes have taken place in the financial situation. The parties to the "Central Bank's Gold Sales Agreement" have always been an important golden holder. In recent decades, they have continued to reduce their holdings. At the same time, the central banks outside the agreement rarely have the idea of ​​increasing gold holdings. However, after the impact of the financial and economic crisis on the currency market, especially on the currency market, and the negative consequences of the increase in currency supply, the negative consequences of currency supply have begun to appear, and everyone has a re -understanding of the roles and weights that gold should play in national reserves.
1999, the central bank of Western Europe has sold gold through the Central Bank's Gold Sales Agreement. From September 1999 to September 2007, the contractor sold 420 tons of gold per year. From the first agreement to 2004, the sales limit was 400 tons, and the upper limit increased from 2004 to 2009 to 500 tons from 2004 to 2009. The third "Central Bank's Gold Sales Agreement" was signed in August 2009, reducing the sales limit from 500 tons of the second agreement to 400 tons. Since 2009, the party has only sold 157 tons of gold.
The Gold Agreement of the Central Bank of Europe
"Washington Agreement": From September 27, 1999 to September 26, 2004, the sales volume of gold is limited within 2,000 tons
"Central Bank Gold Agreement ": From September 27, 2004 to September 26, 2009, the sales volume of gold is limited to 2,500 tons
" Central Bank Gold Agreement ": September 27, 2009 to September 26, 2014 During the period, the sales volume of gold was limited to 2,000 tons, with 19 signed countries, a total of 11.960 tons of gold reserves, accounting for 40%of the global official gold reserves
The 403 tons of gold
According to the international financial statistics from the International Monetary Fund in December 2009, the main golden holder of the tons is (the number in the brackets is the proportion of gold in total reserve assets): the United States 8133.5 Tons (68.7%), Germany 3407.6 tons (64.6%), 3005.3 tons of International Monetary Fund, 2451.8 tons of Italy (63.4%), France 2435.4 tons (64.2%), China 1054.0 tons (1.5%), 1040.1 tons in Switzerland (28.8 %), Japan 765.2 tons (2.4%), 612.5 tons (51.7%) in the Netherlands, and 607.7 tons (4.7%) in Russia. India has recently purchased 200 tons of gold from the International Monetary Fund, ranking 11th, ranking 11th, 557 tons (6.4%).
One of the most watched central banks in recent months is the Bank of China. China is now the largest gold market in the world. In the past six years, China's foreign exchange reserves have increased six times to $ 2.2 trillion. Its trade surplus and the inflow of foreign investment have helped economic growth. However, the global economic recession and the recent US dollar pressure means that China's gold and US dollar ratio in its reserves.
The official gold reserve in China rose from 600 tons in 2003 to 1054 tons in April 2009. Judging from the gold holdings of central banks around the world, China ranks fifth. As mentioned above, India just purchased 200 tons of gold in the International Monetary Fund in 2009. Russia's gold reserves increased by 118 tons compared with early 2008, with a total reserve of 607.7 tons, accounting for 4.7%of its total reserves.
Needless to doubt that gold will continue to play an important role in national reserves.
2.5 value preservation demand
The consequences of the most far -reaching economic and financial crisis have affected governments and investors from all corners of the world. The rise of unemployment rates, unprecedented financial stimulus plans, fear of inflation, and fluctuating financial markets have promoted the formation of investors' understanding and protecting their wealth.
This since 2007 has shaken the confidence of investors and eroded the trust between the public and the decision makers. In addition, the rapid reduction of individual savings and its impact on retirement plans have led to people's more longing for sustainable and simple investment products. From the global perspective, this turmoil makes people more assured and reliable assets.
For many people, the answer is gold, which has re -established a significant position because of its unique attributes.
The market generally recognizes that unlike most traditional investment, diversified regions and uses of gold demand can help it resist economic impact on mainstream assets. The price of gold is affected by many different factors, which also keeps it unique to the entire economic cycle.
Therefore, with the deepening of the crisis, investors have invested in gold in order to seek diversification and balanced investment strategies. In 2008, the investment demand for gold was 64%higher than in 2007, that is, investment increased by $ 15.2 billion. In 2007, it was confirmed that the investment was 686 tons, and in 2008 to 1183 tons. Investment demand has decreased in recent quarters. The data has been 1061 tons since 2009, indicating that the demand is still strong.
It increase in investment demand is many forms. A few years ago, the Gold ET F supported by physical gold provided another convenient way to obtain gold products for the investment population. This method is becoming more and more popular, and it has also promoted the demand for retail investment in recent years.
Since 2000, investors have sought to maintain value through physical gold, so the demand for retail sales of gold bars and gold coins has increased. The demand for gold bars and gold coins in 2000 was 166 tons, rising to 446 tons in 2007, and 649 tons in 2008.
Figure 1-1-5 The confirmation of gold demand distribution
(data source: GFMS)
Recently, Western retail demand has re-recovered, which is a major change in the international gold market. After a large number of Western investors invested in the net reduction in many years, they once again turned their attention to physical gold. At the same time, Chinese investors have also broke out of new demand for gold investment after long -term gold market supervision. The prediction of the demand for gold bars and gold coins is positive. Investors must also seek to protect themselves from the impact of future inflation and wealth decrease, and ensure that they can better protect their retirement savings.
2.6 mineral
gold is still scarce resources. In recent years, there are few new major discoveries, and many findings are often located in places that are difficult to reach, which means that production costs have become increasingly rising. Global gold ore production has been declining for many years, and most people think that this trend will continue for a long time. Since 2000, the peak of gold minerals has appeared in 2001, with a supply of 2646 tons, and the number in 2008 has fallen to 2416 tons.
2.7 Recycling Gold
Crusted gold or recycling. After the surge in the second half of 2008 and early 2009, it has fallen in recent quarters. Selling and consumers hope to profit or cash out from the rise in gold prices. In the first quarter of 2009, the recovery deposit reached 569 tons. By the third quarter, the supply of recycling funds had fallen by 50%from the highest peak to 283 tons, although this is still a relatively high historical value.
2009 Mid -National Jewelry and Jade Shou Jie Jie
The recycling gold plays an important role in gold supply. It is an effective market stability factor. recycling activities usually increased rapidly with the increase in price, decreased with the price decrease. The recycling money entering the Western market has received more attention. They have replaced India, the Middle East, and Asia, and they have accounted for most of the recycling.
3.2010 Gold City Field Inspection
2010 Gold Demand Demand for Watching. Although there are signs of economic recovery in some countries, the uncertainty is still quite high, which includes not only economic uncertainty, but also the uncertainty of financial sector, asset prices, currency and inflation. Many investors want to rebuild wealth, and they are worried that the investment prospects are not as clear as before the crisis. Therefore, retail investors hope that their retirement plans will be guaranteed, institutional investors want to rebuild wealth, they are actively looking for a way to effectively disperse risks, and increase stability for their investment portfolio by allocating gold. The change from the central bank's sales from gold net to net purchase has provided strong support for the gold market in 2010.
2009 Mid -National Jewelry and Jade Shouchu Jiu Jiu
Although the gold jewelry consumers are still highly sensitive to the price outside the Western market, and the local price is still very high, the demand is reduced. There is recovery. With the improvement of economic conditions, the demand for the Western market in 2010 may increase, and the demand for the Chinese market will continue to increase. However, the recent rise in gold prices still has a question mark on the total demand for gold decoration in 2010.
2009 The possibility of the improvement of the economic situation in the middle of the Chinese jewelry and jade head jewelry in the middle of the country also improves industrial demand. If the improvement situation can continue, it will help drive new uses and innovative applications of gold in 2010 and later.
In long -term perspective, the long -term challenges faced by the gold industry are obvious. It is necessary to seek new methods to communicate with younger generations of consumers, so that gold also becomes applicable and important for them, making gold jewelry a way for their self -rewards, enjoying and displaying wealth. The key to solving this problem is to establish young consumers' love for gold, and also requires new interactive channels and communication methods.
The penetration of the Internet to more remote areas means more and more consumers have the opportunity to contact the global consumer market. Under this new platform, consumers have channels to contact the world, and their purchase decisions will also have a wider impact on the environment and society.
How to deal with the threat of other luxury goods will be the main challenge of the continuous growth of the gold jewelry industry in the future. Young consumers are facing the temptation of a large number of goods and brands. The biggest threat of gold jewelry consumption is no longer other precious metals or accessories, but other luxury goods, such as iPod, music, video games, entertainment scenes and travel. For young people, luxury goods mean many different things. It may no longer be reflected in consumption or through expensive consumption, but to achieve leisure and entertainment through weekend breaks, spa and other time recreational products.
The new challenges faced by these gold jewelry markets will require all people participating in it to work hard to ensure that the traditional culture of the Eastern countries' love of gold can inherit the new generation of consumers with brand consciousness and thought.
Gold is never as suitable as today. Let investors and consumers understand the role of gold preservation and guarantee wealth, which will help to make the next generation understand the value of gold and create a new era of gold.