Essay Example on Gold: Precious Metal Riding High in Global Market Despite Recession

Gold is a precious, ductile, and highly malleable metal whose global market has increasingly attracted attention in the recent past, and the price of gold remains relatively higher compared to the historical trends (Bahadur et al., 2019). For instance, between the years 2008 and 2009, the prices for most metals fell characterized by the recession of the global economy (Nicolini, 2018). Various mining companies have found it hard to survive the difficult times, with some of them reducing their rates of production while others are postponing some of their projects (HAN & ZHANG, 2010). This paper presents the top-down analysis method for the Gold Industry.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Gold has been used as a store of wealth as well as the store of wealth as well as a measure of value (Nicolini, 2018). However, today, the use of this precious metal is mostly evident in the manufacture of electronic gadgets and pieces of jewelry (Bahadur et al., 2019). In Western Countries, the quantity of gold has significantly reduced even though gold remains an essential tool in the preparation of balance sheets by many banks across the world (HAN & ZHANG, 2010). Most interestingly, even though the value for gold has been reducing in the Western countries, the demand for the metal has remained high within the Asian countries such as China (Nicolini, 2018).

The gold market is generally influenced by factors such as international transactions, government policies, market forces such as demand and supply, as well as the future expectations and speculations within the gold market (Bahadur et al., 2019). The combination of all these factors influences the quantity, quality, and prices of gold that is transacted within the market (HAN & ZHANG, 2010). As such, countries like Libya, Syria, Egypt, and Ukraine sell gold at a lower cost than the actual value due to the rebellion and the geopolitical strife that are experienced within the countries.

There has been significant growth in the gold industry since the beginning of the financial crisis. For instance, the price of gold rose from $ 639 in 2007 to $1220 in 2010, indicating an increasing demand for the mineral by both investors and governments (Bahadur et al., 2019). The investors have delved in seeking ways of protecting themselves from any form of inflation and eminent financial crisis (Nicolini, 2018).

The demand and supply for the precious metal have remained dynamic across various countries. For instance, India and Eastern Asia and the Middle East alone represented 67% of the global consumer demands in the world by the year 2012 (Bahadur et al., 2019). However, China, India, and the United States account for almost half of the global market demand for gold within the same period (HAN & ZHANG, 2010).

It is essential to note that in each market, the demand for gold is dictated by the cultural and socio-economic factors that exist in each state (Bahadur et al., 2019). As such, the demand and supply for gold remain vast. For instance, the dynamic sociodemographic scenario within Eastern Asia, for example, has backed the socio-economic factors that are unique from country to country (Nicolini, 2018).

The number of competitors in the gold industry has risen tremendously in the recent past, with Newmont being viewed as one of the leaders within the industry (Nicolini, 2018). For instance, in 2007, Newmont Company was the first gold company to be selected to form part of the Dow Jones Sustainability Index (Bahadur et al., 2019). This selection demonstrated their ability to exemplify transformational leadership within the much volatile industry. Other leading players in the gold industry include Jinshan Gold, Gabriel Resources Limited, Harmony Gold Mining Company Limited, AngloGold Ashanti, as well as the Barrick Gold, among others (HAN & ZHANG, 2010).

References

Bahadur, B. Y., Pandey, A., Pandit, R., Kandel, N., & Thakur, A. (2019). Research Study on Gold Purchasing Behavior of Consumers in Nepal. Asian Journal of Education and Social Studies, 1-5.

HAN, M. L., & ZHANG, D. H. (2010). ANALYSIS ON WORLD GOLD INDUSTRY [J]. Resources & Industries, 4.

Nicolini, G. (2018). An Empirical Analysis of the Gold (Pawn) Shops Users in Italy. BANCARIA, 11, 16-39.