The unprecedented decision of the largest Chinese companies to buy gold jewelry companies in Australia and guarantee a supply of precious raw materials by creating a vertically integrated holding company becomes quite understandable from the point of view of the supply and demand of gold. Publication of data on the state of the gold market in the United States clearly shows existing for the past three years the deficit of this metal.
Let's see what generates the demand and supply.
Demand for the metal is formed from the consumption of the local market and export.
Offer metal on the US market is made up of imports, local production of mines and processing of scrap gold.
If we compare the supply and demand for the period from 2012 to 2014, it appears that the demand in 2413 metric tons (530 tons of domestic consumption, export 1,883 tons) exceeded supply 1967 metric tons (955 tons of imports, Gold 677 tons, 335 tons of scrap) to 446 tons, or 14.3 million ounces of the precious metal. The largest deficit of the metal in 228 metric tons came in 2013, whereas in 2012 it was 139, and in 2014 - 79 tons.
For the gold market 446 tons, or 14.3 million ounces of metal - this is a great value. Practically it is the same as it was minted gold "eagles", since 1995, or twenty years. To be precise, the minting "eagles" spent 14.6 million ounces, but these figures are close and give a better understanding of the current deficit in the US market.
It is obvious that these 446 tons, covering the current deficit, we had somewhere to take, and their source of origin is a big question. We can assume that a piece of metal was delivered at the expense of gold reserves at the exchange COMEX, as its stock fell from 11.5 million ounces in 2012 to 7.8 million at the moment. However, 3.7 million ounces is not enough to fully explain the source of covering the deficit. Still a "hole" in more than 10 million ounces, or about 320 tons. Due to some sources - private or public - it was closed, it is impossible to say for sure. There are only a fait accompli, indicating that any noticeable decrease in gold prices on the world market leads to a sharp increase in purchases of precious metal, where the main buyers are the countries of Asia.
It is quite clear and that no matter how great were the gold reserves in the United States and Western Europe, they are unlike paper fiat currencies have their limits. And the lower price of gold Buda, the more will buy physical metal, and the faster the stocks run out. Therefore, in such circumstances, the decision of the Indian jewelers buy Australian gold mines looks like a wise and far-sighted decision.
About shortage of gold
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Jewelry industry is actively working with precious metals - gold and silver, being engaged in the production of jewelry from them, but in the pages of this magazine talking about her comes rarely. This is not surprising, since we are talking primarily about money, and jewelry jeweler award usually far exceeds the cost of the precious metal. However, the event that took place in this industry can be quite affect the gold market in the future.
The fact that India's largest jewelery company Rajesh Exports and her head Rajesh Mehta made a rather unusual step for the jewelry industry. To ensure future supplies of gold for his company Mehta was decided to buy gold mining shaft. To this end, Meta traveled to Australia to assess the potential in place of purchase. On the goal of "ensuring a reliable and constant supply lines of our company" gold Meta willing to spend up to 700 million US banknotes. And it can be as in the embodiment of the share capital of gold miners, and in the form of loans.
The company accounts for about 15% of the total annual gold imports to India, or about 140 tons, so it is understandable that in the present conditions it is trying to solve the problem of security of supply for the precious metal itself.
Another interesting point is the fact that the company is taking a keen interest in the retail jewelry trade in most of Australia. Operation mechanism involves getting gold in Australia, its processing in India and then the final implementation through a network of jewelry stores, which the company plans to expand in Australia itself.
Desire jewelry company buy gold mines once again clearly reflects a new trend that has arisen in recent years in the field of natural resources. Final consumers of raw materials, in this case the precious metal, are the most active players in the acquisition and financing of various projects and mining facilities. However, in contrast to the rather similar steps in the fields of mining copper, coal or other similar sectors when engaged in this state-controlled various Asian companies, it is the first time that the end user wants to purchase the source of gold production.
In fact, the end user removes out of the way of all intermediaries. But in this case it is important not only that it minimizes the costs. Much more important is the fact that such a move may indicate a lack or shortage of physical metal on the market. The main factor affecting the work of Mehta, is no longer the price factor and the introduction of rationing in the market. The biggest reason that could push the jewelry company to such actions could only be unable to guarantee a reliable supply of raw physical because of the abundance of the metal on the market offers such a vertical integration of the business would have no economic sense.
