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Wang Siying, Cindy
◦ Historically:
 medium of transaction
 jewelry
 a relative standard for currency equivalents specific to
economic regions or countries
◦ Investment:
 hedge or safe haven against wars, economic
depressions, and currency-based crises
 way of storing of value
 speculation
Coins and small bars
Exchange-traded gold (SEHK, SHFE)
Gold certificates
Gold orientated funds
During the last financial crisis we have recently
experienced, the price of gold from the top to the bottom
reduced 20%, ranking the least decreasing rate among the
entire investment products
More complicated for stocks. Have to concern the
performance of the companies you invest in. Have to think
about the facticity of their financial statement and other
market information.
Market efficiency:
Investors of gold market are more decentralized and
international. It is harder for a single individual to control the
gold price.
Demand and supply
USD: negatively related.
◦ Both are reserve assets
◦ Relationships with world economy.
◦ Gold measured in terms of USD
Worries of inflation (Oil price)
International policies (especially USA and
countries product oil): wars and unrests
China’s gold market
◦ More influence on world gold market
Bull market for USD
USA fourth quarter GDP in 2009
Increase of interest rate