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Market Outlook


Market Outlook |  Gold market size |  Gold Demand

Market Outlook

Gold is a precious yellow metal that is highly appreciated. For thousands of years, it has been recognized, valued, and utilized. Gold's origins are believed to be "cosmic." The Harvard-Smithsonian Centre for Astrophysics reported that measurements showed gold was generated in a short gamma-ray burst caused by "the collision of two neutron stars - the dead cores of stars that had erupted as supernovae."

Gold is one of the rarest elements in the earth's crust, where it is mostly found in its native form (approximately 80% of total metal worldwide); it can also be connected with other elements, such as silver, which results in the elements electrum and tellurium, but also with copper or iron. The most malleable and ductile transition metal is gold, which can be easily molded and bent. It is regarded as a heavy metal and one of the periodic table's densest elements. It is a noble metal, like silver, iridium, osmium, palladium, platinum, rhodium, and ruthenium, which means it has a high resistance to oxidation.

Gold, on the other hand, can be dissolved in aqua regia. Gold is also a good heat and electrical conductor, as well as a strong reflector of infrared radiation. It is employed as an input in a variety of industries, including jewelry, dentistry, and electronics, as well as for electrical applications, due to these qualities. Its softness and high pricing, on the other hand, tend to restrict its use to industries where no effective replacements have been produced, or to encourage its mixing with other metals (e.g., silver, copper, platinum group metals). Gold is also utilized as a safe-haven asset and investment vehicle during times of economic uncertainty.

Purchases for jewelry creation, industrial reasons, investments in the form of bars and coins, exchange traded funds (ETFs) or similar products, and net sales by central banks account for the majority of gold demand.


Gold Market Size

The market's total size is one of the most noticeable improvements. Mine production peaked in 2015 at 3,217 tons, and experts foresee more erosion in the sector. In 1971, mine production was just 1,518 tons; by 2016, it had increased to 3,169 tons, a growth rate of 1.5% per annum (pa). The demand side of the market is certainly more volatile than mining production.

We already know how much gold is at the earth's core, but how much more can we find in more accessible areas? Because gold has been mined for around 6000 years, exact figures for the amount of gold on the globe are continually in flux. Some historians and gold experts estimate the amount of gold to be 150,000 tons, with optimistic estimates reaching 2.5 million tons. And there's plenty of gold left to mine, with estimations that at least 50,000 tons of mineable gold had still to be discovered a few years ago.

Using one of the various estimates for the global gold supply, it can be calculated the entire value of the global gold supply. More than half of the gold on our planet has been mined in the last 50 years, which could signal that most of the current resources identified are depleting.

The days of enormous gold reefs and massive gold nuggets discovered are long gone. However, the fact that about 50,000 tons of gold remain unmined shows that we haven't yet exhausted all mineable gold sources. And the amount of gold mined each year does not look to be slowing down any time soon. In 1990, the figure was at 1,500 metric tons per year, and it kept increasing since then.

To summarize, the gold market is massive, making it one of the world's largest and most important financial markets today. Gold is clearly a monetary asset and an appealing alternative currency due to its size and liquidity. The massive trading volume also explains why annual mining production (and its cost) has little bearing on gold's price (its equivalent changes hands in the global gold market during one trading day).


Gold Demand

Gold demand will continue to rise as the world's population grows. Not only are more people likely to desire to buy gold as an investment, but the amount of gold used in jewelry and for industrial uses is also expected to rise. Many gold investors believe that rising demand for the precious metal in the next decades will increase supply, especially if the current supply runs out.

When we look at the price of gold over the last 50 years, as well as the last decade, we can find a clear upward tendency. Even if there have been significant rises or dips in gold prices from one year to the next, the overall trend is for it to rise. And the most dramatic increase has occurred in the last ten to fifteen years. People are turning to gold as their confidence and certainty in the stock market and other financial investments drop significantly. Gold's price continues to grow as more people want to buy the precious metal.