Demand & Supply Of Gold

Recent Price Trend Of Gold

Feb-ruary

March April May June July1,250.0

1,300.0

1,350.0

1,400.0

1,450.0

1,500.0

1,550.0

Price/Troy Ounce (USD)

Price/Troy Ounce (USD)

Source: www.goldprice.org

Demand Of Gold

Gold Global Demand (1st quarter of 2011) = 981.3 tons, up by 11% year-on-year from 881 tons in 1st quarter of 2010

Global Turmoil – Gold prices on all time high & Gold demand for ETF’s doubled

41% of demand from India & China Investment demand remains strong

•

Supply Of Gold

Supply declined by 4% to 872.2 tons from 912.1 tons in the 1st quarter of 2010

Decline was due to recycled gold, which was down 6% on year- earlier levels to 347.5 tonnes from 369.3 tonnes in the first quarter of 2010

Supply has averaged approx 2,497 tons per year over the last several years

•

Reasons for Current Price Rise

Collapse of the U.S dollar Gold returning to historic role as

money No other world currencies offer

refuge Massive deficits resulting in hyper-

inflation Invest Demand for gold rapidly rising Gold is in an established powerful

bull market Relatively smaller size of the gold

market Large short positions (Speculation)

Factors Affecting Demand Of Gold

Culture of several countries Hedge against inflationary wealth

loss Investment Diversification Prosperity Central Bank Reserves High Inflation U.S Dollar Low Interest Rates

Factors Affecting Supply Of Gold Lack of exploration of gold Change in Technology Increase in the stretch of demand of gold Miners are holding reserves of gold to clear their hedge

books Downfall in world economy & excessive

inflation

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