Gold Kilo


Commodity Name Gold
Symbol GOLDKILO
Basis for price quote Ex-Ahmedabad - Inclusive of all taxes and levies relating to import duty, customs but excluding sales tax and VAT, any other additional tax or surcharge on sales tax, local taxes and octroi.
Trading unit  1 KG
Delivery unit 1 KG
Quotation / Base value  Rs per 10 grams of Gold with 995 fineness purity.
Tick size (minimum price movement) Rs 1 per 10 grams
Delivery Logic Compulsory delivery
Delivery Center Ahmedabad accredited Vaults of the Exchange as notified by the exchange from time to time. (within a radius of 100 kms from the corporation/municipal limits)
Additional delivery Center(s) Chennai, New Delhi, Mumbai and Hyderabad (within a radius of 100 kms from the corporation/municipal limits).

Deliveries at the additional delivery Centre are subject to the location specific premium/discount as notified by the Exchange from time to time.





A child finds a shiny rock in a creek thousands years ago, and the human race is introduced to gold. Gold is soft, shiny metal and the most ductile and malleable metal known. Gold is chemical element with chemical symbol Au, having atomic number of 79 and its atomic weight is 196.967 with melting point of 1064.43C.

Measurements
Gold like other precious metals is primarily measured in troy ounce weight and grams. Grams are used internationally, troy ounce in US, UK & Australia and tola in Indian sub-continent and Middle East.

Weight Conversion Table

WEIGHT EQUIVALENTS
1 troy ounce 1,097  ordinary ounces
1 troy ounce 31.1  grams
1 ordinary ounce 0.9115 troy ounces
1 ordinary pound 14.58 troy ounces

Purity
Gold's purity is measured in terms of karats and fineness.
Karat (Carat): Pure Gold is defined as 24 carat
Fineness is parts per thousand

History:
Worldwide currency or safety, whatever you want to say, but gold has proved this, many times in history. Gold has been widely used throughout history as money and has been a relative standard for currency equivalents to economic regions and countries. Gold standards have been the most common basis for monetary policies throughout human history, being widely supplanted by fiat currency only in the late 20th century. Gold has also been frequently linked to a wide variety of symbolisms and ideologies. Many European countries implemented gold standards in the latter part of 19th century until these were dismantled in the financial crises involving World War I. After the war, chiefly as a result of a shortage in gold reserves, some of the smaller nations changed their currencies by making them redeemable in some foreign currency which in turn, was convertible in gold. This system was called the gold-exchange standard.  Up to 1931, the great majority of the countries of the world were on the gold standard. After World War II, the Bretton woods system pegged the United States dollar to gold at a rate of US$35 per troy ounce.

The system existed until the 1971 Nixon Shock, when the US unilaterally suspended the direct convertibility of the United States dollar to gold and made the transaction to a fiat currency system.( By the early 1970's, as the Vietnam War accelerated inflation, the United States as a whole began running a trade deficit. The crucial turning point was 1970, which saw U.S. gold coverage deteriorate from 55% to 22%. This, in the view of neoclassical economists, represented the point where holders of the dollar had lost faith in the ability of the U.S. to cut budget and trade deficits.) On December 17 and 18, 1971, the G- 10, meeting in the Smithsonian Institution in Washington, created the Smithsonian Agreement, which devalued the dollar to $38/ounce, with 2.25% trading bands, and attempted to balance the world financial system using SDRs alone. It was criticized at the time, and was by design a "temporary" agreement. It failed to impose discipline on the U.S. government, and with no other credibility mechanism in place, the pressure against the dollar in gold continued. By March 1976, all the major currencies were floating—in other words, exchange rates were no longer the principal method used by governments to administer monetary policy. Dooley, Folkerts-Landau and Garber have referred to the monetary system of today as Bretton Woods II. They argue that in the early 2000s, like 40 years earlier, the international system is composed of a core issuing the dominant international currency, and a periphery. The periphery is committed to export-led growth based on the maintenance of an undervalued exchange rate. In the 1960s, the core was the United States and the periphery was Europe and Japan. This old periphery has since graduated, and the new periphery is Asia. After the 2008 crisis policymakers and others have called for a new international monetary system that some of them also dubbed Bretton Woods II. On the other side, this crisis has revived the debate about Bretton Woods II. On September 24–25, 2009 US President Obama hosted the G20 in Pittsburgh. A realignment of currency exchange rates was proposed. This meeting's policy outcome could be known as the Pittsburgh Agreement of 2009, where deficit nations may devalue their currencies and surplus nations may revalue theirs upward.

Production:
Gold extraction is most economical in large, easily mined deposits. Since the 1880s, South Africa has been the source for a large proportion of the world's gold supply, with about 50% of all gold ever produced having come from South Africa. Production in 1970 accounted for 2/3 of the world supply, producing about 1,480 tonnes. 2009  production was 2,450 tonnes. In 2007 China (with 276 tonnes) overtook South Africa as the world's largest gold producer, the first time since 1905.

Gold
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Some Major Gold Mines in the World
  • Grasdberg Mine: Largest operating gold mine based in Papua New Guinea.
  • Savuka Mines: Deepest mine of about 3774 meters located in South Africa.
  • Detour lake : Largest gold mine in Canada.
  • Yanacocha Gold Mine : One of the lowest cost gold mine based in Peru.
  • Driefontein Consolidated Mine : Largest producer of gold also located in South Africa

India scenario :
India is the largest market for gold jewellery in the world, representing a staggering 746 tonnes of gold in 2010. Gold mining in India is really miniscule and hardly ever gets talked about. For a country that consumes so much gold, it is a pity that there aren't more gold mines in India. Gold production has declined to 2464 kg in 2008 down from 2969 Kg from the preceding value, a change of -17.01%. The highest level history of gold production was reached in 1942 at 80962.97Kg, the lowest level in 1971 at 100.81Kg  

Gold mines in india
  • Deccan Gold Mine Ltd established as gold exploration company in 2003.
  • Hutti Gold Mine Ltd was establisded as Hyderabad gold mine in 1947. It's the only Co. in India which produces gold by mining and processing the gold ore. It is the first india member of the world gold council
  • Kolar gold  Fields

Consumption:
Global gold demand in the first quarter of 2011 totalled 981.3 tonnes, equivalent to US$43.7value in value terms. Much of the 11% year-on-year increase in tonnage demand was the result of strong growth in investment demand. Demand for physical bars and coins was up 52% year on year, at 366.4 tonnes. In value terms, this represented a near doubling of demand from US$8.6bn in Q1 2010 to US$16.3bn. Today, China is the second largest gold consuming market in the world, grew by 32% despite a concurrent 25%. For the first time, annual gold demand (jewellery, investment and technology combined) surpassed the 700-tonne mark. A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8500 m3, or a cube of 20.4 m on a side. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry.

Gold
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Indian Scenario
India is the largest consumer as well as net importer of the gold in the world. Imports of gold are high partly because of the robust domestic demand emanates from a huge population of 1.2 bn. Per capita consumption is only 0.7 grams which is half of USA and one –third of the Middle East. (WGC).

India Gold market is estimated to have more than 3, 00,000 jewellers and bullion dealers primarily running as family business. Due to severe implication on foreign exchange flows, only 23 banks and some selected private and government trading agencies have licenses to import gold. Total gold holdings in India are between 10,000 to 15,000 tonnes out of which RBI has only around 558 tonnes. India's production share in the total world output is less than 1%. Gold has outperformed other asset classes in absolute returns due to its natural hedge against inflation.

According to GFMS, the total gold demand was 963.1 tonnes. Investment demand made up 217.4 tonnes of gold majorly coming from ETFs and sale of bars and coins.

Reserves:
Gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency. As of October 2009, gold exchange-traded funds held 1,750 tonnes of gold for private and institutional investors.

Gold
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Factors influencing the Gold Market:
  • World macro economics factors such US dollar, interest rates & prevalent inflation.
  • Demand for the precious metal.
  • Global mine supply or in other words miners / producers hedging interest.
  • Comparative returns from the equity market.
  • Geo political tensions.

Major Exchanges in world
London Metal Exchange
CME Group
Major Websites
www.lme.com
www.cmegroup.com
www.thebulliondesk.com
www.lbma.org
www.kitco.com
www.gold.org
www.goldlinkschart.com
www.indexmundi.com
www.futuresource.com
www.gfms.com