Gold investments have grown significantly globally during the last decade. Nonetheless, bullion investing is a small proportion compared to the aggregate stash of financial assets.
A number of factors accelerate gold investments by private investors.
Demand has increased as sales of gold jewels have picked up across the Asian region.
Investments in China for the precious metal demand started to increase by 20 percent several years ago and continued to multiply until last year. Chinese purchase gold to protect savings against high prices and foreign currency shocks. Meanwhile, India was reported as buying one-fifth of the total gold market in the world.
In the past, mining output of companies from different parts of the world has failed to meet investment demand which pushed prices of gold higher. The yearly output of South Africa has fallen by half with mining operations in Russia and China falling short.
At present, look at the following facts:
According to the World Gold Council, demand for gold in 2014 fell 3, 923.7 tons from 4, 087.6 tons during the previous year. This was a decline of four percent. Total supply remained at 4,278.2 tons. This shows a marked increase in supply compared to previous years.
A comprehensive report from the Council described the progress and potentials of the Chinese gold market. It pointed out that demand in the private sector is expected to go up 20 percent from the existing level of 1.132 tons annually by the year 2017. China has emerged as the biggest gold market after an unparalleled demand in 2013.
Gold has very special properties. Moderate shares of two to 10 percent can sustain and improve investment portfolio performance. Five to six percent is sufficient for investors with a balanced 60-40 ratio portfolio. Total investment two years ago for gold bars and coins increased 36 percent as against the first nine months of 2012.
Investors like gold since it is a concrete asset with long-term storage value. It has become independent of other assets. They utilize the lack of association with other resources to expand their portfolios and evade risks.