Gold Futures & CFD

Gold has a place in history regardless of the country of origin. The precious metal acquired its high value since prehistoric time and was most probably the first metal used for ornamentation and rituals.

The peculiar aspect of gold is that it is used as a commodity for the production of jewellery and for industrial applications as well as a financial asset. As a store of value, the demand for gold would be a function of the current and expected price of gold, the opportunity cost of holding gold (which could be the rate of return on a risk-free asset, such as US Treasury bills), income, expected future inflation, and overall financial market conditions.

The latest World Gold Council report for Q2 2013 shows a market driven by diverse global demand and by a continuously growing appetite for owning gold jewellery all around the world.

Q2 gold demand totaled 856.3 metric tons, worth US$39bn. Lower prices for the metal generated another surge in quarterly jewellery demand, most notably in India and China. Record quarterly investment in gold bars and coins was countered by sizeable outflows from ETFs as western investors reacted to a seemingly more positive outlook for the US economy and an eventual tapering of quantitative easing.

The consumer market for gold was once again dominated by countries like India and China, which together accounted for almost 60% of the global jewellery sector and around half of global bar and coin demand. Another interesting point to keep in mind is that gold has a powerful cultural meaning in East Asia, India as well as the Middle East.