gold trade

1

GOLD TRADE

by

Fahim Akhtar

fahimakhtar07@hotmail.com

2

Science - Element with symbol Au & atomic number 79

Geology - A substance from mines

great depression -FIAT currency

Confidence and strength

Contents

• Gold – precious yellow metal

• Supply & Demand

• New dimension of investment / trade

in gold

• Investment pyramid

4

BREAKING NEWS

Gold prices gains US $ 80 within few hours in international market

5

10 gram Gold prices up by Rupees 180All Karachi Jewelers Association

21 July 2013

6

• Grand mom hold reservations against jewelers holding them responsible for price hike

• Mr Criticism feels that this is the failure of government control the price

7

They are not right in their views in totality – Mostly these are self conceived and pre focused ideas

There is a solid dynamics and mechanism for gold price movement on either side -- up or down

8

Gold is no more a metal only used for jewelry of female gender

9Gold is a business now having many dimensions

Supply & Demand

We get gold after intricate mining process

Process is complex

Need state of the art equipment

Very expansive

13

China

Australia

USA

South Africa

Peru

Indonesia

Some gold ore deposits

14

Gold Reserves in tones• United States 8,133.5•  Germany 3,391.3 • International Monetary Fund 2,814.0• Italy 2,451.8 •  France 2,435.4• China 1,054.1• Switzerland 1,040.1• Russia 996.4• Japan 765.2• Netherlands 612.5• India 557.7• European Central Bank 502.1• Turkey 445.3• Taiwan 423.6• Portugal 382.5

Jewelry forms two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 29% of demand in 2012, followed by China and the USA

Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2008 central banks and official organizations held 23 percent of all above-ground gold

16

Gold price movement is a dwell between demand and supply of precious metal rarely held along with a few other factors

Speculators, takes into account

economy , financial reports and events

There are many future contracts trading like

gold September gold October

Short selling in futures stabilize the prices

18

Gold prices take effect of

• Dollar falling:

• Low saving rate:

• Inflation:

• Economic crisis:

• A fall in gold supply: technical rebound

• US unemployment figures:

• Political concerns, crisis:

• Festivals:

19

GOLD DOLLAR RELATION

20

21

22

PKR – US $ PARITY

Investment returns in gold

Bought one ounce gold in 2008

Gold price was - 709 US $

72 PKR = 1 US $

Total investment 72 X 709 = 51,000 PKR

Today worth of investment now is 1400 X 104 = 145,600 PKR

Gold takes advantage of rupee depreciation

Smart buying & selling of gold with no physical possession

28

• Commodities exchange work worldwide

• NCEL is working in Pakistan renamed as PMEX

• There are more than 50 commodity houses facilitating

gold trade

• More than 5000 MBAs employed in this sector many of

them with good compensation package in Pakistan

29

• Account in PMEX or international broker

• Variety of gold contracts available

• Futures also traded

• Future carry more risk

But than higher the risk, higher will be reward

Investment

• Conventional physical gold buying

• Online gold trade

• Future trade

• Gold certificates / funds

• Investment in mining

31

Insurance

Investment / saving

speculation

Investment

Gold in possession

Gold investment pyramid

Gold certificate

/ funds

Gold mines

Gold futures / options

Risk

32

33