Gold trade

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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.

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Gold trade

  1. 1. 1 GOLD TRADE by Fahim Akhtar fahimakhtar07@hotmail.com
  2. 2. 2 Science - Element with symbol Au & atomic number 79 Geology - A substance from mines great depression -FIAT currency Confidence and strength
  3. 3. Contents • Gold – precious yellow metal • Supply & Demand • New dimension of investment / trade in gold • Investment pyramid
  4. 4. 4 BREAKING NEWS Gold prices gains US $ 80 within few hours in international market
  5. 5. 5 10 gram Gold prices up by Rupees 180 All Karachi Jewelers Association 21 July 2013
  6. 6. 6 • 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
  7. 7. 7 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
  8. 8. 8 Gold is no more a metal only used for jewelry of female gender
  9. 9. 9 Gold is a business now having many dimensions
  10. 10. Supply & Demand
  11. 11. We get gold after intricate mining process Process is complex Need state of the art equipment Very expansive
  12. 12. 13 China Australia USA South Africa Peru Indonesia Some gold ore deposits
  13. 13. 14 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
  14. 14. 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
  15. 15. 16 Gold price movement is a dwell between demand and supply of precious metal rarely held along with a few other factors
  16. 16.  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
  17. 17. 18 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:
  18. 18. 19 GOLD DOLLAR RELATION
  19. 19. 20
  20. 20. 21
  21. 21. 22 PKR – US $ PARITY
  22. 22. 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
  23. 23. Smart buying & selling of gold with no physical possession
  24. 24. 28 • 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
  25. 25. 29 • 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
  26. 26. Investment • Conventional physical gold buying • Online gold trade • Future trade • Gold certificates / funds • Investment in mining
  27. 27. 31 Insurance Investment / saving speculation Investment Gold in possession Gold investment pyramid Gold certificate / funds Gold mines Gold futures / options Risk
  28. 28. 32
  29. 29. 33

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