gold trade
DESCRIPTION
This presentation was delivered to MBA / MSc Eco students of a leading university in Karachi. Presentation includes various aspects of gold trade of current age.TRANSCRIPT
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Science - Element with symbol Au & atomic number 79
Geology - A substance from mines
great depression -FIAT currency
Confidence and strength
Contents
• Gold – precious yellow metal
• Supply & Demand
• New dimension of investment / trade
in gold
• Investment pyramid
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BREAKING NEWS
Gold prices gains US $ 80 within few hours in international market
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10 gram Gold prices up by Rupees 180All Karachi Jewelers Association
21 July 2013
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• Grand mom hold reservations against jewelers holding them responsible for price hike
• Mr Criticism feels that this is the failure of government control the price
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They are not right in their views in totality – Mostly these are self conceived and pre focused ideas
There is a solid dynamics and mechanism for gold price movement on either side -- up or down
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Gold is no more a metal only used for jewelry of female gender
9Gold is a business now having many dimensions
Supply & Demand
We get gold after intricate mining process
Process is complex
Need state of the art equipment
Very expansive
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China
Australia
USA
South Africa
Peru
Indonesia
Some gold ore deposits
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Gold Reserves in tones• United States 8,133.5• Germany 3,391.3 • International Monetary Fund 2,814.0• Italy 2,451.8 • France 2,435.4• China 1,054.1• Switzerland 1,040.1• Russia 996.4• Japan 765.2• Netherlands 612.5• India 557.7• European Central Bank 502.1• Turkey 445.3• Taiwan 423.6• Portugal 382.5
Jewelry forms two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 29% of demand in 2012, followed by China and the USA
Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2008 central banks and official organizations held 23 percent of all above-ground gold
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Gold price movement is a dwell between demand and supply of precious metal rarely held along with a few other factors
Speculators, takes into account
economy , financial reports and events
There are many future contracts trading like
gold September gold October
Short selling in futures stabilize the prices
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Gold prices take effect of
• Dollar falling:
• Low saving rate:
• Inflation:
• Economic crisis:
• A fall in gold supply: technical rebound
• US unemployment figures:
• Political concerns, crisis:
• Festivals:
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GOLD DOLLAR RELATION
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PKR – US $ PARITY
Investment returns in gold
Bought one ounce gold in 2008
Gold price was - 709 US $
72 PKR = 1 US $
Total investment 72 X 709 = 51,000 PKR
Today worth of investment now is 1400 X 104 = 145,600 PKR
Gold takes advantage of rupee depreciation
Smart buying & selling of gold with no physical possession
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• Commodities exchange work worldwide
• NCEL is working in Pakistan renamed as PMEX
• There are more than 50 commodity houses facilitating
gold trade
• More than 5000 MBAs employed in this sector many of
them with good compensation package in Pakistan
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• Account in PMEX or international broker
• Variety of gold contracts available
• Futures also traded
• Future carry more risk
But than higher the risk, higher will be reward
Investment
• Conventional physical gold buying
• Online gold trade
• Future trade
• Gold certificates / funds
• Investment in mining
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Insurance
Investment / saving
speculation
Investment
Gold in possession
Gold investment pyramid
Gold certificate
/ funds
Gold mines
Gold futures / options
Risk
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