Gold is the oldest precious metal known to human and for thousands of years it has been valued as a global currency, a commodity, an investment and simply an object of beauty.
Introduction:
Gold (Chemical Symbol-Au) is primarily a monetary asset and partly a commodity. It is the world's oldest international currency and important element of global monetary reserves With regard to the investment value, more than two-thirds of gold total accumulated holdings is with central banks' reserves, private players, and held in the form of jewellery. Less than one-third of gold's total accumulated holdings are used as "commodity" for jewellery in the western markets and industry.
Gold (also called bullion) is primarily a monetary asset and partly a commodity. Gold is the world's oldest international currency. It is an important element of global monetary reserves. It is considered as a commodity as it can be acquired and stored in the form of Jewellery, Bars, Coins and Gold Deposits. It is also called precious metal, which means it does not rust (oxidise) at normal conditions. It is resistant against many acids and a good electric conductor, which makes it useful for electronic circuits. It is useful for jewellery because of its inertness.
Economic Importance:
Global Scenario:
South Africa, the United States and Australia are the three largest gold producing countries. Other major producers are Canada, China, Indonesia, and Russia. However in recent years, China has become the world’s largest producer of gold, overtaking South Africa's top position in 2007.
Turkey has become an important net exporter. Vietnam, usually a large buyer; and Thailand are also exporting gold now. Demand for gold is widely spread around the world. East Asia, the Indian sub-continent and the Middle East accounted for 72% of world demand in 2007. 55% of demand is attributable to just five countries - India, Italy, Turkey, USA and China. India is the world’s largest gold consumer, followed by China.
Domestic Scenario:
India is arguably the largest bullion market in the world. It has been until now, the undisputed single-largest Gold bullion consumer. In spite of being the largest consumer of gold, India plays no major role globally in influencing this precious metal's pricing. Gold production in India is very low. Karnataka, Jharkhand and Gujarat produce small quantity of Gold. There is a huge mismatch between demand and primary supply in India, the balance being made up by imports. India imports around 500-800 tonnes of gold on an average every year. Major trading center for gold is Mumbai.
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