The evolution of the gold market and its role in the world monetary system

THE EVOLUTION OF THE GOLD MARKET AND ITS ROLE IN THE WORLD MONETARY SYSTEM

History of Gold has about six thousand years. This ancient metal in today occupies an important place in the international economy, the economy of every country in the world, and finally, a symbol of the wealth of people. Each person in your life always seen gold [...]

History of Gold has about six thousand years. This ancient metal in today occupies an important place in the international economy, the economy of every country in the world, and finally, a symbol of the wealth of people. Each person in your life always saw gold in the form of coins, bracelets, rings, earrings, chains, bank bars, etc. And while everyone was aware that it is expensive, or, in the language of economists, has value, despite the relatively small volumes.

Gold has always played, and today continues to play an important role both in the development of world history in general, and of international economic relations in particular. Throughout the history of financial relationships it was a guarantee of stability of currencies, as well as a barrier to governments printing excessive amounts of paper money and protect people's savings from inflation concerns. States that have not used the gold standard in the management of the financial system in their countries, often subject to inflationary shocks, because the desire of governments to increase their spending, without having a currency board, led to economic crises.

Today, the precious metal out of the monetary and currency circulation and settled in deposits and transactions with them are only for special markets. To understand the role of gold turn to some historical aspects.

Evolution

The process of gold production in the world's history has three periods. The first began on the eve of the First World War, the second - is at the beginning of World War II, and the third period is connected with the demonetization of gold in the early 70-ies of the last century.

So, even before World War I, the gold standard was the key to the expansion of international financial relations and international trade. While none of the expansionist centers was dominant, and therefore in the global economic environment, which is characterized by intense rivalry between the great powers, that gold is a means of ensuring global monetary and credit relations.

After the Second World War due to the increase of its currency and the economic potential of the slogan "a dollar is better than gold," the U.S. launched a struggle for supremacy of the dollar. Since August 15, 1971 they have imposed so-called "golden embargo" on the convertibility of dollars to foreign central banks, thus putting in motion a process demonetization of this metal.

Under pressure from the developed countries of the Western world have been forced to abandon the system of monetary and foreign exchange settlements, which have been linked to gold. Since 1970, gold, as evidenced by the history of the gold market has always increased sharply in times lower rates of central banks.

The transition to the gold standard took quite a long time. During the 70's - 80's was the last Unbind the dollar to gold, from this time, and the financial and banking systems are held on trust.

According to international and domestic experts, the main factors that will affect the precious metals market in the future, will be the economic and political. The economic factors include the monetary policy of the largest states, inflation rates, production volumes, strong demand from the largest and most numerous of the world China, and other international investors, the price of energy. With regard to political factors, the example is a solution to the North Korean nuclear issues and Iran.

The role of gold

The main changes in the role of the "yellow metal" in the monetary sphere late XX - early XXI centuries lie in the fact that lending money removed gold from both domestic and international trafficking of. Today, gold is no longer communicates directly to goods not listed gold price. But it retains a vital role in the economic turnover as extraordinary world money (contingency).

Thus, shocks, which, unfortunately, sometimes attend human civilizations and lead to wars and other disasters, are funded by taxpayers, the cost of which they do not have a clue. This, in turn, argues that the world is on the brink of major financial crises and to "help" mankind can come back gold.

Price behavior

Analyze the dynamics of change in the price of gold since 1980, which was the peak in world history, the precious metals market. Influenced by political and economic factors, and because of high inflation rates in the U.S. and other Western countries, the new "explosion" of the oil crisis, deterioration of the international situation with regard to the events in Iran and Afghanistan, the pressure wave of speculators and tezavratorov, January 21, 1980 year per troy ounce (31.1034807 grams) has offered 25 times more than in past decades. On the London Stock Exchange paid $ 850 U.S., while at the New York market, the metal for delivery in 12 months was quoted at U.S. $ 973 per troy ounce.

In this speculative price peak could not long resist. Advantage of the favorable situation, speculators in the 1980 - 1981 years. selling previously purchased gold and received a significant profit. Supply jewelry and other industries fell under the influence of two main factors - the high prices and strong economic downturn. The dollar against other world currencies increased, and the price of gold Stavan below.

The downward trend in the prices of precious metals continue to 2001 and reached U.S. $ 260 per ounce of gold.Period beginning in February 2001, accompanied by an increase in demand from industrial producers and international investors, high inflation and geopolitical crises. And it May 12, 2006 the price reached 725 U.S. dollars / ounce.

Positive growth rates began in the III quarter of 2007. The strong demand from investors, the instability of the dollar against major currencies, new a peak in oil prices warmed up the price of gold to U.S. $ 760 per troy ounce. In December last year, the price of gold ranged from 1670 to $ 1800 per ounce. And in February 2013, the price dropped to $ 1550 an ounce.

Investing in gold

Nowadays almost every interested person can easily get access to the world gold market and invest in this precious metal. Moreover, gold can act not only as a "dead weight", but as a percentage deposit. In addition, people can use it in a term, and possibly risky transactions, but bringing a considerable profit. Particularly efficient to invest in gold during the crisis, since then, as a rule, other means of savings and investment do not show proper performance.

The golden rule of investors around the world is as follows: 10-15% of the investments necessary to implement into gold. However, some analysts believe the financial markets fit 35-50% of its investment portfolio to convert to this precious metal. According to the analytical forecasts, in the next five years, profitability of gold may exceed the mark of 500%. And given the instability of the global financial system, and the fact that the world's gold reserves are almost exhausted by the day, these forecasts may soon come true.

Total

Certain evolution of money and provoked interstate political and economic activities, the demonetization of gold predetermined qualitative change its role and functions in the world monetary system. Gold has become a tool of the capital market and financial assets, without losing its value and importance.

At present, investments in gold - the safest investment. They, of course, will not bring profits, but be sure to protect from significant losses in a difficult economic situation.