Precious metals are unique assets: highly liquid, yet scarce; they have emotional, cultural and financial value.
Investors range from individuals to pension funds and sovereign wealth funds, and are located in both developed and emerging markets.
Characteristics of gold
Gold is one of the most exploited minerals since ancient times. The uniqueness of this mineral, due to its beauty and its ability to remain unchanged over time, has helped it retain its great value since the beginning of history.
Among the physical properties of gold are its high electrical and heat conductivity. It is also highly resistant to almost all existing chemicals, except aqua regia (a mixture of hydrochloric acid and nitric acid), and substances such as potassium or sodium cyanide, the latter being used industrially to liberate gold (known as “gold cyanidation”).
Its ease of manipulation and its inalterability have allowed the jewellery and ornamentation industries to use this material in an infinite number of ways and uses.
The price of gold
There is no doubt that gold is a highly valued commodity in the stock market. In fact, there have been times when the price has risen very significantly, such as in the 1970s, a decade that began with a price of 35 dollars per troy ounce and ended with a rise in the price of gold to 35 dollars per troy ounce and ended up rising to 850 dollars, an increase of 2,300% in just 10 years.
Experts point out that we are living in years in which an environment has been created that is very similar to the one
The pattern of behaviour is in fact very similar to that of the 1970s.
Therefore, we are facing a positive outlook where experts, such as those at ETF Securities, point to the possibility of inflation where negative real interest rates are positive for gold.
Our main precious metal: Gold
“The modern gold market is the picture of diversity and growth. Since the early 1970s, the volume of gold produced each year has tripled, the amount of gold bought annually has quadrupled, and gold markets have flourished around the world” *
Key facts for investors to know:
Gold is a major asset driven by many factors, not just investment demand.
Gold is one of the most effective diversifiers.
Gold provides competitive returns compared to other major financial assets.
Over time, fiat currencies, including the US dollar, tend to lose value against gold.
The combination of these factors means that adding gold to a portfolio can improve risk-adjusted returns.
https://www.gold.org/about-gold/gold-demand
Demand for gold
Gold is now purchased by a far more diverse set of consumers and investors than at any time in history.
Average annual demand for GOLD:
~4,100 tonnes / ~US$166 billion.
Estimates of demand by sector*
The diverse uses of gold, in jewellery, technology, investment and by central banks, mean that different sectors of the market rise to prominence at different times in the global economic cycle.
This diversity of demand and the self-balancing nature of the gold market underpin its strong qualities as an investment asset.
(*) Based on 10-year average demand estimates ending in 2026. Figures may not add up to 100% due to rounding. Source: Thomson Reuters GFMS, World Gold Council.
