Sukra - Personal Finance

Gold – the precious metal. Also called as yellow metal.  Latin name – Aurum. ISO Currency code of Gold is XAU

Gold is measured by troy weight and by grams.

1 troy ounce ( toz ) =  31.1034 grams

1 gram = 0.0321507 troy ounces (t oz)

Carat / Karat :-

Gold is too soft for ordinary use. It is hardened by adding copper or other base metals. The gold content of gold alloys is measured in carats (k), pure gold being designated as 24k.
Alloys with lower carats, typically 22k, 18k, 14k or 10k, contain higher percentages of copper

Gold purity is measured in Karats and fineness.
Pure Gold is 24Karat.  Fineness is parts per thousand.
18k Gold = (18/24)th of 1000 = 750 fineness
22k Gold = .9166 fineness

Supply & Demand :-

According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes. The total demand for the gold is around 3500 tonnes. Jewellery accounts for three quarters of the gold demand.  This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal.

Demand for Gold

Industrial         500 tonnes
Investment      700 tonnes
Jewellery         2500 tonnes

Gold Supply

Mine productin             2200 tonnes
Recycled Gold                950 tonnes
Net central bank sales   500 tonnes

Central Banks :-

Central banks and IMF hold over one-fifth of global above ground gold as reserve. (around 29,000 tonnes).  Bulk of these sales by these banks have been regulate d by central bank gold agreement (CBGA) which stabilizes ssales from 15 of the wordls biggest holds of gold.