1. Overview Of gOld
 By:
 varsha gaitOnde
 PalB 2235

2. Contents
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Introduction
History of gold
Value chain of gold
Gold price from last decades
Analysis of price
Reasons

3. Introduction
• Gold is a comparatively dense, shiny, yellow metal.
• Gold is quite resistant to corrosion (by oxygen, but also many
other chemicals).
• There are medical (dentistry), chemical and industrial
applications of gold.
• However, aside these rather limited applications (for which, in
fact, gold often can be substituted with other materials like
copper, ceramics etc.) the metal is more or less useless.

4. History of Gold
The history of gold, from 5,000 years ago until 2011, in 9 acts.
1.Ancient History and Classical Era
2. Medieval Times
3. Early Modern Times
4. Classic Gold Standard (1816 – 1914)
5. Interwar Period (1918 – 1939)
6. Bretton Woods System (1944 – 1971)
7. Bull Market: Upward Trend(1971 – 1980)
8. Bear Market: Downward Trend(1980 – 2001)
9. Bull Market: Upward Trend (2001 – )

5. VALUE CHAIN OF GOLD

6. How Gold is Mined
Exploration
Exploration Drilling
Blasthole Drilling
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Blasting
Underground Mining
Ore & Waste Haulage

7. How Gold is Mined
Heap Leaching
Mining
Oxidization
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Leaching
Stripping
Electro-winning

8. How Gold is Mined
Smelting
Gold Bullion
Refining
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Reclamation

9. Domestic Market
India is the largest consumer of Gold in the world accounting for
nearly 25% of the total gold consumption in the world. Most of
India gold consumption is in the form of jewellery and as
investment demand. Indian gold demand is supported by
cultural and religious traditions which are not directly linked to
global economic trends as a result of which demand remains
steady even during high prices.

10. International Market
Gold demand in 2010 reached a 10 year high of 3812.2
tonnes. Demand was up 9% year-on-year, and
marginally above the previous peak of 2008 despite a
40% increase in the annual average price level
between 2008 and 2010.
In value terms, total annual gold demand surged 38%
to a record of US$150 billion.

11. China is currently the largest producer of Gold in the
world having overtaken US in the last couple of years.
Asian consumers led demand with the revival of the Indian
market and strong momentum in Chinese gold demand,
which together constituted 51% of total jewellery and
investment demand during the year 2010

12. Why do Gold Prices Soar?
• Rising Inflation
• Depletion of Gold
• Excessive Demand
• Gold Speculation
• Wars and Economic Depression

13. Fluctuations In The Gold Price And Its
Relation To Oil Markets
• . The oil market is influenced by developments in
currencies, especially dollars, and sometimes can
cause developments in the world’s major currency
markets. Factors that influence the price of oil are
varied and include political issues, the balance of
supply and demand, the status of alternative energy
sources and the financial markets. However, while oil
price changes have a significant impact on world
financial markets, they do not have a direct effect on
fluctuations in the world gold market.

15. Risks of Gold
1. Physical Risks of Gold
2. Gold Exchange Risks
3. Volatility
4. Political
5. Gold Scams

16. How tHe Gold PRices ARe
deteRmined ?
• Supply and demand conditions in the long
run,
• Short run due to the physical limitations on
the gold mining and the inelastic
characteristics of the gold production,
changes in the gold prices are more subject
to demand forces

17. Factors contribute towards the
steady rise oF the gold rate?
1. First, a reduction of gold supply
2. From 2001 the global gold production falls
within a decade by 10%
3. Still, demand in jewelry and by industry
continues to increase due to India’s and
China’s economic performances
4. Additionally, at the end of the decade central
banks began to step up their gold reserves

18. Conti…..
1. Other important factors are the since 2001
increasing US national debt and the
weakening of the US dollar relative to other
currencies
2. The financial crisis of 2008, during which the
US government nationalized the two biggest
US mortgage lenders and the biggest US
insurer, drove up demand for physical gold
and exchange traded funds

19. uses oF gold
• Gold is a soft metal usually alloyed in jewellery to give it
more strength, and the term carat describes the amount
of gold present (24 carats is pure gold)
• Gold for jewellery can be given a range of hues
depending on the metal with which it is alloyed (white,
red, blue, green etc.)
• Jewellery consumes around 75% of all gold produced.
• Metallic gold is applied as a thin film on the windows of
large buildings to reflect the heat of the Sun's rays
• Gold electroplating is used in the electronic industry to
protect their copper components and improve their
solder ability.

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24. How Gold is Traded
• Over the Counter
• Between principals, not through exchanges
• Contracts terms are flexible
• Main centers: London, New York, and Zurich
• Mining companies and central banks tend to
transact their business through London and New
York
• Twice daily during London trading hours there is a
“fix” which offers reference prices for that day’s
trading.
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25. The Settlement Process
• The basis of settlement is delivery of a
standard London Good Delivery Bar, at the
London vault nominated by the dealer who
made the sale. Currency settlement for gold
transactions will generally be in US dollars
over a US dollar account held in New York.
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26. Market Dynamics: Gold
Prices
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27. OccasiOns fOr buying gOld .
• Oman and Pongal in the south, Durga Puja
in the east, and Dhanteras and Dusherra
for the north and west
• festival of Akshaya Thrithiya, which
usually falls in April, has also become a
red-letter day for gold purchases
• There are 16 types, including rings,
bangles, necklaces and special pieces for
the head, nose, ankles and waist.

29. Thank You
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