Demand of Gold

Demand of Gold

Demand of Gold

Gold has it's own emotional, cultural and financial value, all over the world, which are the key factors to determine the demand across generations. Gold is moulded into jewelry and used to manage risk in financial portfolios and protect the wealth of nations, it is also found in smart phones, and cutting-edge medical diagnostics.

These diverse uses of gold, in jewelry and technology and by central banks and investors, mean that across the decades gold has witnessed a rise in value and demand in various sectors. This self-balancing nature of the gold market clearly indicates that there is basically an uphold in base level of demand.

Around nine per cent of the world's demand for gold accounts that it is to be used for various technical applications. The electronics industry accounts for the majority of this where Gold is said to have conductivity and resistance to corrosion which makes it the material of choice for manufacturers who want to develop high-specification components. In addition, the metal’s also possesses excellent biocompatibility which means that it continues to be used in dentistry. Apart from electronics and dentistry, gold is used across a variety of high-technology industries, in complex environments which includes the space industry and fuel cells. Gold’s catalytic properties have begun to create demand both within the automotive sector, and within the chemical industry. A range of healthcare and catalytic applications for gold are currently being in the process of development as the field of nanotechnology expands. While this demand is still a very small portion in tonnage terms, the growing number of patents being published relating to gold nanotechnology truly suggests that many new applications are in development stage in the coming years.

If talked about the demand of Gold in India, it may rise in the second half of 2016 after falling to the lowest in seven years in the first half as beneficial monsoon rains will control rural demand during the peak festive season which is on the way. India is considered as the second-biggest consumer of gold. Two-third of the total demand of gold in India, comes from villages, where jewelry is a symbol of traditional investment. Consumption of the yellow metal is increasing day by day as farmers continue to reap benefits from their crops each passing year. If considered the statements of economists, gold demand is estimated to return to its normalcy in the upcoming season of festivities and weddings. The quarter ending in December typically accounts for about a third of India's gold sales since it includes the start of the wedding season and festivals like Raksha Bandhan, Dhanteras, and Diwali, which are considered auspicious for buying gold. Diwali falls in the last week of October in 2016.

In the neighboring country China, which is the world's biggest consumer of the gold, demand of this yellow metal dropped 14 percent in the second quarter of 2015 to 183.7 tones. In 2015 Indian demand stood at 864.3 tones.

The annual total supply of gold was calculated somewhere around 4,000t over the last 10 years. While many are aware that gold is sourced from the earth through mining, there are also other ways in which gold is supplied to the market.

Gold has always been a safe option for investors seeking a shield during stock market selloffs, global economic turmoil, and low interest rate environment. So, no surprise in saying that 2016 proved to be a perfect storm for gold, as there was a gradual increase in the demand of gold across the markets worldwide and also in the Indian market. As demand and supply are directly proportional, the supply of gold has automatically gained a boost over last few years.

DISCLAIMER: The views expressed in this blog are those of the author and may not reflect those of Jindal Bullion Limited. The author has made every effort to ensure accuracy of information provided; however, neither Jindal Bullion Limited nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Jindal Bullion Limited and the author of this article do not accept culpability for losses and/or damages arising from the use of this publication