| Gold is the oldest precious metal known to man and for thousands of years it has been valued as a global currency, a commodity, an investment and simply an object of beauty. |
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Major Characteristics
- Gold (Chemical Symbol-Au) is primarily a monetary asset and partly a commodity.
- Gold is the world's oldest international currency.
- Gold is an important element of global monetary reserves.
- With regards to investment value, more than two-thirds of gold's total accumulated holdings is with central banks' reserves, private players, and held in the form of high-karat jewellery.
- Less than one-third of gold's total accumulated holdings are used as “commodity” for jewellery in the western markets and industry.
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| Demand and Supply Scenario |
- Gold demand in 2010 reached a 10-year high of 3,812.2 tonnes, worth US$150billon, as a result of;
- strong growth in jewellery demand;
- the revival of the Indian market;
- strong momentum in Chinese gold demand and
- a paradigm shift in the official sector, where central banks became net purchasers of gold for the first time in 21 years.
- China was the world's largest gold producer with 340.88 tonnes in 2010, followed by the United States and South Africa.
- In 2010, India was the world's largest gold consumer with an annual demand of 963 tonnes.
- The total supply of gold coming onto the market in 2010 reached 4,108 tonnes, a rise of 2% from 2009 levels.
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| Global Scenario |
- London is the world’s biggest clearing house.
- Mumbai is under India's liberalised gold regime.
- New York is the home of gold futures trading.
- Zurich is a physical turntable.
- Istanbul, Dubai, Singapore, and Hong Kong are doorways to important consuming regions.
- Tokyo, where TOCOM sets the mood of Japan.
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| Indian Scenario |
- India is the largest market for gold jewellery in the world. 2010 was a record year for Indian jewellery demand; at 745.7 tonnes, annual demand was 13% above the previous peak in 1998. In local currency terms, Indian jewellery demand more than doubled in 2010.
- A 20% rise in the rupee price of gold combined with a 69% rise in the volume of demand, pushed up the value of gold demand by 101% to
 1,342 billion. This compares with 2009 demand of 669 billon.
- The rising price of gold, particularly in the latter half of 2010, created a 'virtuous circle' of higher price expectations among Indian consumers, which fuelled purchases, thereby further driving up local prices.
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| Factors Influencing the Market |
- Above ground supply of gold from central bank's sale, reclaimed scrap, and official gold loans.
- Hedging interest of producers/miners.
- World macroeconomic factors such as the US Dollar and interest rate, and economic events.
- Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures, or industry restructuring, all affect metal prices.
- In India, gold demand is also determined to a large extent by its price level and volatility.
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| Measurement |
| Weight Conversion Table |
| To convert from | To | Multiply by |
| Troy ounces | Grams | 31.1035 |
| Million ounces | Tonnes | 31.1035 |
| Grams | Troy ounces | 0.0321507 |
| Kilograms | Troy ounces | 32.1507 |
| Tonnes | Troy ounces | 32,150.70 |
| Kilograms | Tolas | 85.755 |
| Kilograms | Taels | 26.7172 |
| Kilograms | Bahts | 68.41 |
| Troy ounces | Grains | 480.00 |
| Troy ounces | Avoirdupois ounces | 1.09714 |
| Troy ounces | Penny weights | 20.00 |
| Avoirdupois ounces | Troy ounces | 0.911458 |
| Short tonne | Metric tonne | 0.9072 |
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| Purity |
Gold purity is measured in terms of karat and fineness:
Karat: pure gold is defined as 24 karat
Fineness: parts per thousand
Thus, 18 karat = 18/24 of 1,000 parts = 750 fineness |
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