Gold Demand

Gold’s characteristics make it a great investment vehicle determine. The demand and supply dynamics of its market, make its functionality and appeal very extensive. This commodity’s demand has been attributed to Turkey, USA, China and India and is driven by the differing cultural and socio-economic factors of these countries. New patterns of demand can be brought about by the socio-economic and demographic changes of these nations, which happen to be the key gold consumers of the world.

The demand to buy gold coins can be categorized into three main categories: jewelry, industrial and investment demands.

Jewelry demand

Over two thirds of the demand for gold consists of jewelry. This is one of the largest industries making consumer goods. The gold jewelry market is widespread across the USA and India with the latter controlling the volume while the former controls the retail value. India’s demand for gold is determined by religious and cultural values, which have a direct impact on economic trends globally.

The combination of desirability and affordability plays a great role in jewelry demand. This rises when the prices are stable and declines during the times when prices are volatile. The value of gold jewelry rises steadily with these patterns making them very desirable.

Investment demand

Physical gold demand has considerably grown over recent years allowing for the increase in gold prices. The fact that the demand for this precious commodity continues to outstrip its supply has made many individuals, as well as institutions, interested in investing in it. The commodity’s ability to insure investors against instability and uncertainties has also contributed to the demand, and most investors seek protection against a number of risks. Gold demand growth has brought about the development of different ways of accommodating both institutional and private investors.

Industrial demand

The dental and medical uses of gold are the two main characteristics in the industrial demand for gold. The commodity’s corrosion resistance nature and its electoral and thermal conductivity have made it very popular thus increasing its demand in these two fields. Research has proven that gold can also act in fuel cells as a catalyst and also in chemical processes, as well as pollution control. Gold particles have great value in cancer treatment and its role in glazing coating also makes it very valuable.

The above are some of the reasons for the increase of gold demand over the years. In the next few years, look for this trend to continue.