The Future of Gold: Why the Gold Price Can Only Go Up

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First, gold is a finite resource, whose underground reserves will eventually be completely extracted. Second, world population is growing and prospering. This increases gold demand for jewellery and …

First, gold is a finite resource, whose underground reserves will eventually be completely extracted. Second, world population is growing and prospering. This increases gold demand for jewellery and industrial purposes. Third, central banks have been increasing their gold reserves. All of this points towards an inescapable raise of gold’s value and its price.

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  • 1. Benefits of Gold:
    A Finite Resource
    Or
    Why the Gold Price
    Can Only Go Up
    www.goldratefortoday.org
  • 2. Gold is a Finite Resource
    First, gold is a finite resource, whose underground reserves will eventually be completely extracted
    Second, gold population is growing and prospering. This increases gold demand for jewellery and industrial purposes
    Third, central banks have been increasing their gold reserves. All of this points towards an inescapable raise of gold’s value and its price
    www.goldratefortoday.org
  • 3. Gold is a Finite Resource
    Natural resources can be grouped into renewable, or infinite, resources such as coffee, wood and sugar
    These commodities can be replenished and will never come to an end
    On the other hand, there are finite resources which cannot be produced
    These are plutonium, sulphur and gold
    www.goldratefortoday.org
  • 4. Gold is a Finite Resource
    Gold production and underground gold reserves
    In 2009 and 2010 world gold production stood at 2,450 and resp. 2,500 tonnes
    It is estimated by the world still has gold resources of 51,000 tonnes
    Thus, with the current annual mining volume, underground gold reserves would last for 20 years
    www.goldratefortoday.org
  • 5. Gold is a Finite Resource
    www.goldratefortoday.org
  • 6. Gold is a Finite Resource
    Sources of gold supply
    Not all gold supplies come from mines
    On a five year average (Q4 2005 to Q3 2010) mine production contributed to only 59% (2,209 tonnes) of the supply
    Recycled gold is responsible for 35% of gold supply (1,323 tonnes)
    The remaining 6% (234 tonnes) are net official sector sales (such as from central banks)
    www.goldratefortoday.org
  • 7. Gold is a Finite Resource
    www.goldratefortoday.org
  • 8. Gold is a Finite Resource
    Sources of gold demand
    What does the demand side say?
    Certainly, demand goes up in the long term, not only because of India’s and China’s fondness of gold jewellery and their industries’ demand for gold
    On a five year average, gold demand was for jewellery 57% (2,151 tonnes), investment 31% (1,182 tonnes) and industrial purposes 11% (433 tonnes)
    www.goldratefortoday.org
  • 9. Gold is a Finite Resource
    www.goldratefortoday.org
  • 10. Gold is a Finite Resource
    Gold demand around the world
    The Middle East, the Indian subcontinent and East Asia were responsible for around 70% of world demand in 2009
    China, Hong Kong, the US, Turkey and Saudi Arabia accounted for half of word demand
    www.goldratefortoday.org
  • 11. Gold is a Finite Resource
    Investment demand
    Since 2003 demand for investment purposes experienced the strongest growth of gold demand
    From 2004 until 2009 investment demand increased by 119%
    www.goldratefortoday.org
  • 12. Gold is a Finite Resource
    Industrial demand
    Industrial demand for gold increases with the growing economies, as gold is used in electrical components and medical applications
    Recent research has discovered additional uses for gold, such as in chemical processing and pollution control
    www.goldratefortoday.org
  • 13. Gold is a Finite Resource
    Industrial demand 2
    On the other hand, many products using gold are continuously redesigned to reduce the amount of gold needed (by cladding based metals with gold), or by finding substitutes for gold. These may be palladium, platinum and silver
    www.goldratefortoday.org
  • 14. Gold is a Finite Resource
    Three facts should be kept in mind
    Gold is a finite resource, which underground supplies is one-twentieth of the annual gold production
    Word population is growing and prospering, which drives up demand for jewellery and in the industry
    Central banks (notably from Russia, China and India) have recently began to increase their gold reserves
    www.goldratefortoday.org
  • 15. Visit my blog:
    www.GoldRateForToday.org
    Live Gold Rates,
    Independent Trading Advise
    and many Resources
    about Gold Investing
    Interested in More?
    www.goldratefortoday.org