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Gold (also called bullion) is primarily a monetary asset and partly a commodity.
Gold is the world's oldest international currency. It is an important element of
global monetary reserves. It is considered as a commodity as it can be acquired
and stored in the form of Jewellery, Bars, Coins and Gold Deposits. It is also called
precious metal, which means it does not rust (oxidise) at normal conditions. It
is resistant against many acids and a good electric conductor, which makes it useful
for electronic circuits. It is useful for jewelry because of its inertness.
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South Africa, the United States and Australia are the three largest gold producing
countries. Other major producers are Canada, China, Indonesia, and Russia. However
in recent years, China has become the world’s largest producer of gold, overtaking
South Africa’s top position in 2007.
Turkey has become an important net exporter. Vietnam, usually a large buyer; and
Thailand are also exporting gold now. Demand for gold is widely spread around the
world. East Asia, the Indian sub-continent and the Middle East accounted for 72%
of world demand in 2007. 55% of demand is attributable to just five countries -
India, Italy, Turkey, USA and China. India is the world’s largest gold consumer,
followed by China.
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India is arguably the largest bullion market in the world. It has been until now,
the undisputed single-largest Gold bullion consumer. In spite of being the largest
consumer of gold, India plays no major role globally in influencing this precious
metal's pricing. Gold production in India is very low. Karnataka, Jharkhand and
Gujarat produce small quantity of Gold. There is a huge mismatch between demand
and primary supply in India, the balance being made up by imports. India imports
around 500-800 tonnes of gold on an average every year. Major trading center for
gold is Mumbai.
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