Boullion Market

8/4/2019 Boullion Market

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Bullion market

previous metals stored in bulk in the form of

ingots (bars) or coins;

A bullion market is a place where preciousmetals such as gold, silver, platinum and

palladium can be bought and sold


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Supply and demand

speculation


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Factors affecting prices in the indian

market

Demand and supply:

1. Historical high demand for gold in India necessary tosupply huge jewelry market is the number one factoraffecting the price of gold in India.

2. India is unable to sustain adequate domestic goldproduction due to gold mine resourceshortages. Indiashistorical gold prices had alwaysbeen higher due to this fact.

3. Rising population in India triggers even higherdemand for gold driving gold price in India today evenhigher.
http://www.goldbullionpro.com/historical-gold-prices-why-investors-need-to-look-back/http://www.goldbullionpro.com/historical-gold-prices-why-investors-need-to-look-back/


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Supply of gold

Worlds gold supply is one of the most

important determining factors for gold price in

India today. Once, worlds gold supply sustains

production shortages due to depleting mineraldeposits, the prices for gold will soar not only

in India but all over the world.


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Dollar vs commodity prices

1. The value of the US dollar is one of the majorfactors affecting gold price in India today. Whenthe dollar is weak, the spot price of gold is onthe rise and vice versa

2. Weak US Dollar:

the US dollar is the key driver for Gold; as thedollar goes, so will gold; but in the oppositedirection. Gold is the anti-dollar with a high

inverse correlation to the dollar! In the end, goldis still a monetary asset and trades like acurrency.


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Gold Production and Mining

A rare metal

. All extracted and still available gold has a

total weight of 165 thousand tonnes

One third of gold entering the market comes is

from recycled sources (jewelry, industry etc.).

The rest is from gold mines.


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Central Banks and Gold

Central banks, international entities (e.g.

International Monetary Fund) and

governments are the single largest holder of

gold in the world. These institutions controlledend of 2009 16.2 per cent (26,780 tonnes) of

the worldwide available gold


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Industrial Demand for Gold

Between 10 and 15 per cent of the annual goldproduction is used in the industry: From 2008 to2009 industrial demand for gold dropped by 13

per cent. In 201 Demand from industry was 420 tonnes, or

10 per cent. This is 287 tonnes for the electronicsindustry, 50 tonnes for dentistry, and 83 tonnes

for other industrial purposes. In contrast,jewellery demand was 2060 tonnes.0 the goldsupply stood at 4108 tonnes


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Demand in the Jewelry Business

In 2010, gold processed to jewelleryaccounted for 54 per cent of all goldpurchases, making jewelry the biggest

contributor to gold demand. That is a rise of17 per cent from 2009 to 2010. The increase iseven more remarkable, as the gold priceincreased in the same period by 26 per cent.

The biggest buyer of gold for jewelry is India,with 745 tonnes, followed by China (400tonnes) and the United States (128 tonnes).


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reserves


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Interest rates

interest rates directly impact exchange rates.

In turn, but at a slowing pace, Gold

Prices reflected the value of a currency plus its

interest rate
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Recession and recovery

During recessions commodityprices are expected to behavecorresponding: at the beginningof a recession, the demand forcommodities are low, which

reduces commodity prices. When the real interest rates

have been cut by the centralbank a few times, and aeconomic turn-over is in sight,commodity prices are expected

to gain again. http://www.tradecommodities.c

o.uk
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TOKYO (Commodity Online) : The massive tsunami following a powerful earthquake in Japan alsohad its impact on global commodity markets as all major commodities, including Goldand oil, tookinitial impacts.

Analysts said Japans currency yen suffered along with most major equities in Asia following theimpact which inturn hit oil prices.

They however added that geo-political tensions on the other side of the globe continued to supportthe black Gold and any major incident in Saudi Arabia could support oil prices again.

Gold prices however took advantage of the devastating earthquake and tsunami as gold futures onthe Tokyo Commodity Exchange climbed up.

Analysts said the bullion is likely to extend gains as traders may start buying the commodity as asafe haven asset.

US gold futures for April edged up towards $1,417 after Japan news. The Bullion also benefittedfrom Middle East and Nortrh Africa unrests and also on reignited worries about euro zonesovereign debt.
http://www.commodityonline.com/commodity-market/commodity-prices/goldhttp://www.commodityonline.com/commodity-market/commodity-prices/goldhttp://www.commodityonline.com/commodity-market/commodity-prices/goldhttp://www.commodityonline.com/commodity-market/commodity-prices/goldhttp://www.commodityonline.com/commodity-market/commodity-prices/goldhttp://www.commodityonline.com/commodity-market/commodity-prices/gold


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Commodity cycles


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Platinum

When the economy took a plunge from 2008-2009 nearly all markets werehit hard. Notoriously volatile platinum prices suffered a severe drop,falling from an all-time high of about $2300 per ounce in March of 2008 toa low of about $760 in October of 2008. However, since thedrop, platinum prices have been creeping up steadily and investors areclaiming that the prices will continue to climb

Platinum is an appealing precious metal investment because of itsdependable and growing demand. It is an essential metal in theproduction of approximately 20% of all consumer products

The automobile industry, for example, uses over 1/3 of all of theinternational platinum supply manufacture catalytic converters that aremore environmentally friendly.

In addition to its industrial application, platinum is also widely used in finejewelry. In fact, platinum is the rarest of all precious metals, with a higherprice than gold. About 90% of all international platinum supplies aremined in South Africa and Russia.


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Gold

The main driver for the dollar's decline is low interest ratesin the U.S. compared with higher and rising rates abroad.Lower rates mean a lower return on cashand thepressure from that factor could intensify next week whenthe Federal Reserve's rate-setting committee is expected to

signal that U.S. short-term rates will likely remain near zerofor many months to come. On Wednesday, Fed ChairmanBen Bernanke is scheduled to give the central bank's first-ever press conference following a policy-setting meeting.

The dollar fell nearly 1% against a broad basket of

currencies this week, following a drop of similar size lastweek. The ICE U.S. Dollar Index closed at its lowest levelsince August 2008, before the financial crisis intensified.


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Intro

Foctors in general

4 metals graphs and reasons


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silver

The recent spate of Comex silver contract margin hikes by the CMEGroup (CME) is causing many small speculators to sell theirpositions, as they cannot afford the increased maintenance margin.

Other futures trading firms have recently raised their marginrequirement far beyond those required by the Comex, and margins

on gold contracts are now less than half those of silver Meanwhile, backwardation in the silver market is persisting.

The May contract is now 97 cents more expensive than theDecember 2015 contract;

on April 13, the gap between the front-month contract and theDecember 2015 one stood at just 40 cents.

In early March, it reached 109 cents.

Demand is still continuing to outstrip supply in this market, whichmakes it harddespite silvers price surge over the last few months to argue that silver is a "bubble" just waiting to pop.


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investements

Due to low bank deposit interest rates, gold investment in India is apreferred method over any other investment mechanism.

Investment Demand for Gold

In 2010 investment demand for gold totalled 1,333 tonnes. This is 995tonnes for bars and coins and 338 tonnes were purchased by

exchange traded funds and similar products (Gold Bullion Securities,SPDR Gold Shares, Central Fund of Canada etc.)

Investors can also purchase certificates, funds, or exchange tradedfunds. Here, no physical gold is purchased, which therefore doesnot incur shipping and storage fees. Certificates depend on thesolvency of the issuer and do not influence supply and demand at

the commodity exchang
http://www.goldbullionpro.com/gold-investment-in-india-worlds-largest-gold-market/http://www.goldbullionpro.com/gold-investment-in-india-worlds-largest-gold-market/


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Economic and political factors

National crisis like, war and civil war, looting

etc. create insecurity among the minds of

people.

Documents

Boullion Market