GOLD TRADE

by Fahim Akhtar fahimakhtar07@hotmail.com
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Science - Element with symbol Au & atomic number 79 Geology - A substance from mines great depression -FIAT currency

Confidence and strength
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Contents
• • • Gold – precious yellow metal Supply & Demand New dimension of investment / trade in gold • Investment pyramid

BREAKING NEWS

Gold prices gains US $ 80 within few hours in international market
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21 July 2013

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

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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

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

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Gold is a business now having many dimensions
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Supply & Demand

We get gold after intricate mining process Process is complex

Need state of the art equipment
Very expansive

Some gold ore deposits

China Australia USA

South Africa
Peru Indonesia

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

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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

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

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 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

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:
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GOLD DOLLAR RELATION

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PKR – US $ PARITY

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Investment returns in gold
Bought one ounce gold in 2008 Gold price was 72 PKR = 1 US $ Total investment 72 X 709 = 51,000 PKR 709 US $

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

• 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

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• 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

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Investment
• Conventional physical gold buying • Online gold trade • Future trade • Gold certificates / funds • Investment in mining

Gold investment pyramid

Gold futures / options

speculation

Gold mines

Investment

Gold certificate / funds Investment / saving

Gold in possession

Insurance

Risk

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