What factors cause gold investment demand

Like any other commodity, in essence, the trend of international gold price is mainly affected by the relationship between supply and demand. When the supply of gold exceeds the demand, the price of gold will decline; When the demand for gold is greater than the supply, the price of gold will rise. Here are the demand factors of gold.

At present, the demand for gold is mainly divided into these three categories. Here is a brief introduction to the demand factors of gold:

The first is the investment demand of gold. In fact, the current investment demand is mainly divided into retail investment and EFTs (gold trading funds). EFTs (gold trading funds) are the main ways to invest in gold recently. However, in 2005, they had increased by about 53% in tonnage; For example, countries in Asia and the Middle East have a tradition of investing in gold.

However, the main impact on gold price is that investment demand and price elasticity are also the largest compared with other demand factors. Generally speaking, the impact on gold price is the largest.

The second is about the current industrial demand. However, these are mainly reflected in the demand of the electronic industry and the demand of dentists, but they have already accounted for about 10% of the total gold demand at this time; However, even with the restrictions of some industrial industries, the change is relatively stable in general, but the impact on gold price is also small; However, in 2005, it has steadily increased by 2% year on year, which is about 419 tons.

The third is some gold demand. In fact, the current demand has accounted for about 75% of the gold demand, and the overall share is the largest; However, in 2005, it had increased to 5%, reaching 2736 tons.

However, the main impact on the gold price at this time is that gold decoration in the market has a greater impact on the price. In fact, this is mainly a seasonal and cyclical stage. However, in general, it is in the first quarter and the fourth quarter. In fact, the demand for gold decoration is growing significantly in many cases.

Like the wedding and religious festivals in India every year, as well as the Chinese Lunar New Year and Christmas and Valentine's Day in the West, the demand for gold decoration is actually increasing at this time than at other times.