From 2005 to 2012, gold price increased from USD432.6/oz. to USD1664/oz. which corresponds to a compounded annual increase of 18.0% from 2005 to 2012. Gold price has since fallen to around the USD1200 level. Gold is often perceived to be a hedge against many economic factors and can be complex to understand for amateur investors like us. Through my academic work in NUS, I have a much clear picture now of what affects gold price which I would like to share.
In free markets, prices are often determined by an interplay of supply and demand forces. Gold is no exception in this regard. Supply of gold comprises of gold mine production and the recycling of gold. When we look at the demand for gold, we can break it down into 2 sub-categories – Investment Demand or Non-investment Demand. Non-investment demand relates to the usage of gold for jewelry ......From 2005 to 2012, gold price increased from USD432.6/oz. to USD1664/oz. which corresponds to a compounded annual increase of 18.0% from 2005 to 2012. Gold price has since fallen to around the USD1200 level. Gold is often perceived to be a hedge against many economic factors and can be complex to understand for amateur investors like us. Through my academic work in NUS, I have a much clear picture now of what affects gold price which I would like to share.
In free markets, prices are often determined by an interplay of supply and demand forces. Gold is no exception in this regard. Supply of gold comprises of gold mine production and the recycling of gold. When we look at the demand for gold, we can break it down into 2 sub-categories – Investment Demand or Non-investment Demand. Non-investment demand relates to the usage of gold for jewelry ......
