Gold - What price structural change in the industry?

P Chaphekar, Allan Trench

Research output: Contribution to journalArticlepeer-review

Abstract

The gold market has correspondingly undergone a key change in its dynamics, to the extent that it now faces profound structural change. Gold is regarded as a store of wealth as well as a commodity. Investment, in the form of coins, bars and physical gold backed ETFs, rather than jewel is becoming a key driver of global gold demand. The US Treasury is heavily reliant on foreign investors to fund its federal deficit, and its main creditors (China, Japan, the Gulf States and Russia) have expressed concerns about the impact of US reflationary policies on the US dollar. The gold will increasingly be regarded as a strategic asset by both the state and private sector, whether or not the dollar strengthens in the short term. It is also going to impact exploration and mining operations of overseas entities. The government and industry led initiatives in the developing world to boost jewel sales may additionally reflect a desire to encourage retail investment in gold via jewel rather than bullion products such as bars and coins.
Original languageEnglish
Pages (from-to)16-18
Number of pages3
JournalAusIMM Bulletin
VolumeOct
Issue number5
Publication statusPublished - 2009

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