...an overview of why gold is a good investment choice. I will give an analysis of gold’s current and historical prices, why an investor should invest in gold, and the wide range of options that are available to an investor that chooses to invest in gold. Gold is recognized worldwide as a true form of currency. It has a universal store of value; it can function as a hedge against inflation, protection against the declining value of the dollar and is a good option to sustain wealth in the declining financial market. Gold is a currency that option and is desired by many people, easy dividable, scarce, and durable. Gold had an intrinsic value before it became money and that is the foundation of its worth. Gold has increased in price over the last decade by 500%. In the increase in price is attributed to the drop in the value of the dollar and the expectation that inflation will rise to above average levels. Gold was valued at $900 an ounce in April 2008, $1,888.70 in August 2011 and as of July 25, 2012 it was valued at $1,608 an ounce. Through March 2012 the spot price of gold returned of 18.5 percent, while the S&P 500 has had a return of only 4.11 percent. The chart below shows the increase in gold prices for the last ten years and gold’s performance price for the last 30 days, six months, one year, and the last five years. 10 year gold price history in US Dollars per ounce. http://goldprice.org/gold-price-history.html http://goldprice.org/gold-price-history-html ...
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...FOR AND SUPPLY OF GOLD’’ CASE STUDY SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTERS OF BUSINESS MANAGEMENT COURSE OF ALLIANCE UNIVERSITY SUBMITTED TO PROF DR.SAMIK SHOME (SENIOUR LECTURER) ALLIANCE BUSINESS SCHOOL SUBMITTED BY ABHISHEK M.R RAHUL CHARU BALDWA SHEIKH PARVESH T.SHAMEEL (2012-14, Section H) Group 01 LIST OF CONTENTS Serial Number | Contents | Page number | 1 | Executive summary | | 2 | Issue analysis | | 3 | Data analysis | | 4 | Key decision criteria | | 5 | Alternatives analysis | | 6 | Statistical data | | 7 | Non-Price factors | | 8 | Conclusion | | Executive summary India is one of the largest consumers of gold in the world. India’s share alone for the demand of gold comes to around 25%, which is a very large number considering there are around 200 countries in this planet. One of the main possibilities for this astronomical demand for gold in India might be because of the fact that gold plays a major role in Indian culture. Festivals like Diwali and AkshayaTritiya demand the use of the gold irrespective of the fact that gold is a very costly metal. Gold is a commodity which represents status symbol (conspicuous goods) The reasons why there is a mismatch between the demand and the supply of gold in India is quite obvious. Hutti gold mine company in Karnataka being the only company in India to mine and process gold ore and the fact that we recycle about 105 tonnes of gold per annum to meet...
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...Introduction The gold standard is a special form of monetary system whereby the standard unit economic account relies upon a fixed mass of gold (Mayer 76). With respect to this definition, the gold standard is thus a monetary system whereby the value of currency of a given country is determined by a fixed mass of gold. In addition, the domestic currency of such a country can easily be converted into gold. To ensure that the domestic currency of a country can easily be converted to gold, the amount of money that is in circulation is normally equivalent to the gold reserves that that a specific country has. In addition, countries that use the gold standard usually make their international payments in gold. The exchange rates between countries normally remains constant. This is due to the fact that their currencies are valued using their gold reserves that are based on the specific gold weights. As a result, no country can take advantage of the other in the course of international trade. Ever since the days of early civilization, precious metals and stones have been used as a medium of exchange. In ancient Egypt, Rome, Greece, China and India, precious metals and stones have been used as a medium of exchange for goods and services in both domestic and international trade. Gold, silver and bronze were perhaps the most widely used metals during those times. This is because they held desirable properties that made them fit for these purposes. They were portable, rare, difficult...
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... Do Soaring Price and Mounting Demand in Indian Gold Market Speak of a Paradox? Demand for gold is a widespread observable fact across the world. However, the major demand for gold comes from five countries, namely India, Italy, Turkey, US and China. Among these countries, which account for 55% of the total gold demand, India’s share alone comes to around 25%. Cultural and religious traditions involving wearing of jewellery play a major role in influencing Indian gold demand. Around 75% of the world demand for gold is jewellery-based and the rest 25% is investment based. Speaking about India’s fondness for gold, Lord John Maynard Keynes is alleged to have remarked, “India’s gold consumption reflects the ‘ruinous love of a barbaric relic’.”1 In India, there is a huge mismatch between demand for and supply of gold. Hutti Gold Mine Company located in Karnataka is the only company in India, which produces gold by mining and processing the gold ore. It produces around 3 tonnes of gold per year. Another source of supply of gold in India has been coming from recycled jewellery/scrap jewellery. In 2006, it was reported that, “Over the past five years, Indians have recycled an average of 105 tonnes of gold per annum.”2 To meet the bulk of the demand, India imports gold. India imports around “700 tonnes of gold a year”.3 In October 2008, demand for gold increased. While this increase in demand for gold was attributed to the falling gold price from $900 to $712 per oz.4, some were of the...
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...of the palm oil in the market. Gold h become the trend of nowadays and people tend to invest their money in gold to for the stability in future. Thus, the price of the gold is keeping increasing and the impact may not the same as the other kind of commodity such as crude oil and rubber. The few stock of gold in market and the investor attitude in keeping the gold gave the influence to the price in the market. As the gold is having the value on its on interior value, there is not much advancement of technologies in the industries. This supply will never increase in the market with the high demand each year especially on the festive seasons, thus, the gold price will always increase. Abstract Keywords: Gold, Commodity, Supply, demand, price. Introduction The articles “The Gold Rush is on” was cited from The Star Online written on 5 May 2011 by Vijenthi Nair. People are now rushing to by the gold as the price of the gold was kept on increasing each week. Even though the price is hiking non- stop gold lover is keep on hunting for the gold as they are fear the price will go even higher. The price increased has created the demand for gold to become higher as people have non-stop buying due to a lot of speculation created. In spite of it, people still hope for the price to go lower as they will buy more for the future investment. The increasing of the gold demand had also keeping up the demand for the supplementary jewelleries to the gold such as diamond and follows the...
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...Of Management Lucknow August 2013 A MICROECONOMIC STUDY ON GOLD Submitted to Professor Sanjay K Singh By Section E, Group J Aman Doharey (PGP30244) Mahesh Raja R (ABM11045) Prerna Pal (PGP30265) Rohit Mandappalli (PGP29341) Shradhha MeryllinePanna (PGP30280) Swagata Das Chowdhury (PGP30419) Tanuj Kumar Lodhi (PGP30420) Table of Contents Introduction Background Protection Requirement Elasticity Of Gold Gold Consumption Scenario in India Need and Objective Of Study Research Methodology Tools and Techniques Hypotheses Data Analysis 1. US Dollar 2. Crude Oil 3. Silver 4. Inflation 5. Sensex Values Findings and Conclusions INTRODUCTION This report emphasizes on studying, interpreting and illustrating the various economic factors affecting the consumption and price of the precious metal Gold. We examine the impact of factors that maybe reason for such distortion and also see how the change in gold price impacts other commodities in the open market. Background Used as a sovereign since ages, gold has always been a sought after commodity. The price variation has almost always been upwards and has had a steep rise in this trend. A few pointers about Gold can be inferred as below. Production Gold is majorly obtained through mining, other sources may include recycling, trading etc. Through these sources gold enters the market. Requirement Gold is an essential commodity in any country’s economic state. It is...
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...GOLD DINAR - USING BILATERAL PAYMENT ARRANGEMENT OR ELECTRONIC PAYMENT SYSTEM1 WRITTEN BY: NURADLI RIDZWAN SHAH BIN MOHD DALI nuradli@kms.uniten.edu.my BAKHTIAR ALRAZI HANIFAH ABDUL HAMID UNIVERSITI TENAGA NASIONAL ABSTRACT2 The Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad first expressed interest in a universal currency that could help unite Muslim countries after attending the OIC summit in Doha, Qatar in November 2000. This led to an international conference entitled "Stable and Just Global Monetary System - The Islamic Dinar" organized by the International Islamic University in August 2002. After much research and consultation, a gold-based currency, called the ‘gold Dinar’, was put forth as a viable solution, and was expected to be implemented in 2003. This paper is an extension of the previous paper entitled "The Implementation of Gold Dinar. Is it the End of Speculative Measures?" published in the Journal of Economic Cooperation, SESRTCIC, Turkey volume 23, 2003. No 3. Keyword: Gold Dinar, Bilateral Payment Arrangement, Electronic Gold Payment System Introduction Several seminars and conferences were held in matters pertaining to gold Dinar in order to create the awareness of the government’s agencies, public and private sectors on the return of the gold Dinar as an international payment system. The seminars and conferences are also intended to find the best system or mechanism to ensure that the implementation of such system would not affect one’s economy...
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...Rush to Sell Gold as Price in Yen Jumps Article Address: http://online.wsj.com/article/SB10001424127887323820304578412283865306950.html?mod=WSJ_business_AsiaNewsBucket#articleTabs%3Darticle Review: The news shows when Japanese currency Yen is softening, the gold price is rising in Japan, which causes Japanese families rush to sell gold to gain more money. The phenomenon may indicate that the gold demand in Japan is slightly elastic in this period. As an abandoned currency, gold is not necessary for trading in modern life. People usually use gold for jewelries and investment. Hence, the normal demand of gold is even, and the purchase happens only when consumers have excess money for it. When Yen is declining, the price of gold in Japan increases. Higher gold price force the Japanese families reduce their needs for gold, and sell it to get more benefits. From this procedure, it is clear that when gold price is raised, demand of gold will be reduced, which proves the gold demand in Japan has small elasticity now. However, if the devaluation of Yen continues, the price of gold will keep soaring, which means the demand of gold in Japan may change into inelastic. In other words, Japanese families may start to buy gold in future, and the demand of gold will not be affected by the gold price. In conclusion, the gold demand in Japan is slightly elastic or sometimes inelastic. The reason for this situation might be gold is a luxury product. The public needs for luxury goods may not be...
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...rigid adherence to the gold standard "caused" the crash and depression of 1929-39 and beyond. But, as Bernanke and Liaquat admit, the central bankers of the post-war period in somes cases (France and the US quite openly and purposefully) "sterilized" their gold so that the money supply did not expand when needed but in fact contracted. So it was a failure to follow the gold standard rather than gold itself which was the culprit. Nor do either Bernanke nor Ahamed explain why the gold standard worked quite well for a century before WW1, although Bernanke admits that is an "unexplained" issue. While acknowledging the long history of the gold standard and its importance in the development of central banking, Ben Bernanke made crystal clear that we're never going back to the gold standard. He explained that the argument supporting the gold standard has two parts: 1) the "desire to maintain the value of the dollar"—implying a "desire to have very low price stability, and 2) an aversion to allowing "the central bank to respond with monetary policy to booms and busts," explaining that "the advocates of the gold standard don't want to give the central bank that power." But regardless of the impetus for these arguments, he explains, a return to the gold standard now "would not be practical for monetary reasons or policy reasons": Bernanke pointed out various reasons that there's simply "not enough gold" to sustain today's global economy. First, extracting gold from the ground is a costly...
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...Part 1-Micro Economic Principles Applied Why do people spend hours lining up outside stores to purchase the iphone 5, when there are so many cheaper alternatives available? In recent months, an observation was made about consumer behaviour when it came to the purchasing of the recently released model of the iphone 5, by Apple Inc. The devices cost start at $199 us dollars and require a two year service plan. Why then, would persons stand in line for days, to acquire this device? In examining the demand and supply of the said product, statistics were researched to gain a better understanding of the reasoning behind such behaviour, and the opportunity cost attached. Information attained by Apple showed that the iphone 5 demands outstrips supply, as pre-orders shattered previous records, and some customers having to wait over a month to acquire the device. More than 2 million phones were bought in the first 24hours after apple took pre-orders. Customers lined up at the 356 retail stores across the US for days in advance. Why then, even after the fact that the phone is readily available across the US, would consumers behave in such a manner? It would seem that the actual supply of the iphone was limited, hence affecting the demand for the product. The features of the phone were advertised to be not significantly different from the phones previous model. The significant interest of the product was as a result of pent up demand, as some customers had been holding off their purchases...
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...Price and Mounting Demand in Indian Gold Market Speak of a Paradox? Demand for gold is a widespread observable fact across the world. However, the major demand for gold comes from five countries, namely India, Italy, Turkey, US and China. Among these countries, which account for 55% of the total gold demand, India’s share alone comes to around 25%. Cultural and religious traditions involving wearing of jewellery play a major role in influencing Indian gold demand. Around 75% of the world demand for gold is jewellery-based and the rest 25% is investment based. Speaking about India’s fondness for gold, Lord John Maynard Keynes is alleged to have remarked, “India’s gold consumption reflects the ‘ruinous love of a barbaric relic’.”1 No tC In India, there is a huge mismatch between demand for and supply of gold. Hutti Gold Mine Company located in Karnataka is the only company in India, which produces gold by mining and processing the gold ore. It produces around 3 tonnes of gold per year. Another source of supply of gold in India has been coming from recycled jewellery/scrap jewellery. In 2006, it was reported that, “Over the past five years, Indians have recycled an average of 105 tonnes of gold per annum.”2 To meet the bulk of the demand, India imports gold. India imports around “700 tonnes of gold a year”.3 In October 2008, demand for gold increased. While this increase in demand for gold was attributed to the falling gold price from $900 to $712 per oz.4, some...
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...Mounting Demand in Indian Gold Market Speak of a Paradox? This case study was written by Hepsi S warna under the direction of Akshaya Kumar Jena, IBS CDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was written from published sources. License to use for IB S M umbai S em-I, C lass of 2014 Ó 2009, IB S C ase Dev elopment C enter. A ll rights reserv ed. To order copies, call +91-08417-236667 or w rite to IB S C ase Dev elopment C enter (IB S C DC ), IFH E C ampus, Donthanapally , S ankarapally Road, H y derabad 501 504, A ndhra P radesh, India or email: info@ibscdc.org www.ibscdc.org Do Soaring Price and Mounting Demand in Indian Gold Market Speak of a Paradox? Demand for gold is a w ides pread obs ervable fac t ac ros s the w orld. How ever, the major demand for 115.249.252.231/casestudies/mumbai/ME0006.asp#_ftn1 1/4 7/13/12 IBS Case Studies Demand for gold is a w ides pread obs ervable fac t ac ros s the w orld. How ever, the major demand for gold c omes from five c ountries , namely India, Italy, T urkey, US and China. Among thes e c ountries , w hic h ac c ount for 55% of the total gold demand, India’s s hare alone c omes to around 25%. Cultural and religious traditions involving w earing of jew ellery play a major role in influenc ing Indian gold demand. Around 75% of the w orld demand for gold is jew ellery-bas ed and...
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...“A STUDY ON PROBLEM FACED BY GOLD INDUSTRY AND PROVIDING FEASABLE SOLUTONS TO OVERCOME IT” Dishant Gosain1 Mehak Ahuja2 Sonu Kumar3 1, 2, 3 Student, Delhi School Of Management, Delhi Technological University (formerly DCE), New Delhi, India dishant3281@gmail.com, mehak.ahuja3@gmail.com, sonurca11@gmail.com ABSTRACT In India, gems and jewellery has always symbolized wealth and prestige. It has always ignited desire unlike any other object of importance. This industry has always been an important driver of Indian economy with its great influence in large-scale employment generation, earnings from foreign exchange through exports, and value addition. The Indian gold industry, which has a vast potential of being a kingpin of the financial system of India, is currently facing potential stagnation, with difficulties at multiple fronts. It is hence essential for its various stakeholders, like the government, Reserve Bank of India, and the gold industry, to initiate large-scale transformation so as to ensure a sustainable and well modulated industry. In this article we try to develop a clear policy framework to address key structural and regulatory challenges. The various institutional mechanisms required to bring the entire gold industry under standard and uniform governance to pilot long term direction setting on gold are formulated and numerous suggestions on reducing the supply constraints in gold without perturbing CAD have been proposed. The aim of the article is...
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...Long ago the gold standard made sense for America, but not today. America has been off the gold standard for 40 years and for good reason, since the U.S. stopped allowing dollars to be converted into gold. The United States started printing more dollars to finance war expenses and in turn caused too much money to be in circulation and inflation. Everyone realized that the U.S. could not possibly have enough gold to back all of the greenbacks in circulation. If foreign investors decided to cash in their dollars for gold, it would bankrupt the U.S. President Nixon decided in 1971 to decree that the U.S. dollar was no longer redeemable for gold. Since that decree we have been on a fiat system, which basically means that the value of money is determined by supply and demand for money, goods, and services. If we returned to a gold standard, it would constrict the government’s ability to manage the economy. The FED would no longer be in control of our monies and interest rates, which would be a good thing. This would cause our government to enforce fiscal discipline, a balanced budget, and limit government intervention. We could not return to a gold standard if the rest of the world did not. If we did, we would have to pay off all our debts to other countries in gold, because they do not want our dollars. It would essentially bankrupt us just as it would have if we would have stayed with the gold standard. Gold Standard The gold standard sounds good on paper. Gold does not fluctuate...
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..."Nothing Gold Can Stay" When in the church on Jay Mountain, Ponyboy recites the poem, "Nothing Gold Can Stay" written by Robert Frost. He remembered the poem, but couldn't recall the meaning of it. Johnny finds out the meaning of the poem at the end of the book, and tells everyone in his gang the meaning and how it connects to the greaser gang. Even though Robert Frost talks about plants in this poem, its figurative meaning is about babies and how they lose their innocence over time. “Nothing Gold Can Stay” symbolizes pony in the outsiders. The first line in the poem is “Natures First Green Is Gold” . This means that when the plants start budding, they are very beautiful. Ponys life can be compared to “natures first green is gold”. Pony is the...
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