Transformation of the gold market and its prospects

Transformation of the gold market and its prospects


Gold has long been a measure of wealth and prosperity both among individuals and on a global scale. After discovering this precious metal, people appreciated its beauty, making it the main instrument for the exchange of goods. Over time, gold began to perform the function of money, and up to the middle of the last century, all currencies of the world were backed by gold.

And of course, the accumulation of gold reserves was one of the main factors of the world economy. Since antiquity times, the availability of a treasury in a state was a must, and gold in bars, coins, jewelry, and utensils constituted the basis of wealth.

Even today, every national bank of a country has its own gold reserve, which guarantees economic stability

Of course, today, gold is not the only way to invest capital. But it retains its position as one of the most stable ways for accumulation because there have been no significant fluctuations in gold prices, and there never will be. Golden Way decided to devote this article to the transformation of the gold market and new trends in its development.

Let’s start with the gold mining

While some tens of years ago, among the largest gold producers were mainly the countries of Europe and South Africa, we see that as of 2020 the rating of the leading countries in the production of this precious metal has changed significantly. Who is the largest player in the field of gold mining today?

China is now in the first place. This country provides the lion's share of gold in the world. The top five also include Russia, Australia, the USA and Canada. After them there are some smaller players such as Peru, Ghana, South Africa, Indonesia and Mexico. By the way, Indonesia has become a real "dark horse", which in recent years has taken the lead, leaving European gold miners behind.

How much gold is mined annually? As of 2019, the production of the solar metal was 3463 tons per year, and almost the half of all gold quantities is provided by the TOP-5 countries, which we have mentioned above. At the same time, gold production is gradually decreasing. Modern trends say that it decreases annually by an average of 1%. There are several reasons for this: the resources of the Earth, alas, are not unlimited, and the process of gold mining is becoming more and more technically complex and time consuming.

And what about the price?

In general, there are two types of gold markets in the world - a local, existing in each country separately, and a global. Two of the world's largest markets are London and Zurich. And in this, the gold industry remains stable. But last year, the price of gold was a pleasant surprise for investors: for the first time in 8 years, it reached its maximum. In April 2020, its value increased by a record 7% to $ 1747.

The distribution of gold by industry has also slightly changed. If earlier most of it was in demand in the jewelry industry, now the demand for gold among jewelry companies has slightly dropped. But instead an intensive use of gold in other industries has began: the growth of electronics production, new discoveries in connection with the use of gold in the chemical industry and cosmetology led to an increase in demand for this metal specifically for production purposes.

And, of course, the demand for gold among central banks of all countries of the world remains unchanged, because the gold reserve guarantees the economic prosperity of a country.

What are the gold investing tendencies?

2020 was a crucial year for investors. The coronavirus pandemic has made its own adjustments in many areas, primarily in investing in intellectual development and construction. Many projects were frozen, others could not stand the blow and closed, bringing only losses to investors. In the wake of such a collapse, people turned to traditional investment methods. And first of all - to investing in precious metals. Therefore, the gold mining industry has increased the value of its shares in 2020, along with the IT. This means that the demand for gold is growing. Today, the trends of 2020 continue, which means it's time to follow the trend and invest in gold which is a reliable and stable investment. Want to try? With Golden Way, you can invest your money in gold bars and, at the same time, in your own development as an investor. Do not expect new fluctuations in the global economy - gold will always carry a price.