This week in our review:
- Thomas: Why is gold considered so valuable
- The Rum Rebellion: Citi predicts a silver price rally
- Umicore: 90% of Cobalt is Recycled Through Efficient Recycling
- BNN Bloomberg: Investors speculate on the direction of stimulus, gold dips
Thomas: Why is gold considered so valuable
Many things have changed in 2020, but one thing remains: the value of gold, writes Thomasnet. Gold is famously used in bars, coins, and jewelry. Gold does not rust or tarnish, and it also withstands economic crises. However, according to Thomas, these characteristics do not make gold special and he points to silver, which has largely the same valuable properties as gold, but is not nearly as valuable.
To understand the value of gold, one must become acquainted with its colorful history, writes Thomas. Precisely when gold was discovered is not known, but its luster and durability made the metal ideal for jewelry making, and due to its rarity, gold became a symbol of royalty and glamour.
Thomas describes in his article the distant history of gold: the Mesopotamians created the first gold jewelry for human use and for decorating buildings around 2600 BC. Later, in 1223 BC, the tomb of the Egyptian pharaoh Tutankhamun was made almost entirely of gold. The first gold coins have been traced back to around 700 BC. Gold and silver coins gradually replaced barter and made trading easier, writes Thomas. Signs of the earliest, primitive gold mines have been observed in Egypt as early as 3600 BC, according to the article. The Romans were the first to develop more efficient mining processes that included hydraulics and water wheels, as well as the process of refining. Ancient mines operated with slave and convict labor, and the slow procurement process increased the value of gold.
The value of gold has followed humanity's phases up to modern times, writes Thomas. After the recession, the price of gold has always seen an upward trend, especially during the California Gold Rush. Thousands of gold miners rushed to the area in search of wealth, and during that time, gold worth $81 million was mined in California. According to the newspaper, the gold rush was a demonstration of both human herd behavior and the longevity of gold's value. If the economy collapses and even if the dollar has no value, people will still hold gold in high regard.
The price of gold varies according to production, demand, and investment behavior, writes Thomas. The magazine reports that many studies have shown the positive elasticity of gold prices, indicating a continuous increase in value as demand rises. Gold has served as a safe haven for investors during economic crises, driving its price upward and demonstrating that gold's value is immune to economic factors. However, the price fluctuates with the global commodity market, Thomas writes, emphasizing that gold can never be exhausted and that every ounce of mined gold can still be found in the earth.
Why is gold so expensive? Because people believe it is, claims Thomas. It has no special properties compared to other commodities, but according to the magazine, it is almost certain that gold will retain its value regardless of economic fluctuations and encourages acquiring some gold for a rainy day.
Read full article in English/ 26.10.2020, Lindsay Gilder
Rum Rebellion: Citi predicts a silver price rally
Gold has performed well this year – a 25% increase in dollars has been seen since the beginning of the year. The year has also been good for silver; in fact, silver's journey has been quite remarkable. This is stated in an online article by The Rum Rebellion. The price of silver collapsed in March to its lowest point in a year, and since then, an increase of 110% has been observed in dollars.
Investment bank Citi predicts that the silver price rally will continue at $40 per ounce over the next year and rise high, even up to $100 per ounce. The forecast is based on increasing investment demand as economic uncertainties grow and industrial demand strengthens into 2021. According to The Rum Rebellion, silver is used in industrial production for pharmaceuticals, electronics, and semiconductors, among other things. Silver is also considered a safe haven during economic crises, much like gold.
In spring, the price of silver plummeted while the price of gold rose. At that time, the gold-silver price ratio was at its highest at 127. According to the magazine, the gap has slightly narrowed as demand for silver increased during the pandemic; buying silver has not been easy during the pandemic lockdowns. Currently, the price ratio is 78, still significantly higher than usual. Rum Rebellion's editor Dan Denning believes that the silver price rally is far from over, and the magazine suggests that right now might be the best time to add silver to one's investment portfolio.
Read full article in English/ 26.10.2020, Selva Freigedo
Umicore: On gold recycling
Gold bar manufacturer and recycler Umicore writes about gold, which is typically known as a safe haven for investors. However, the use of gold in products and technology is determined by its physical and chemical properties, similar to the use of other precious metals. According to Umicore, 90% of all historically mined gold is still in use, and efficient, modern recycling processes support this gold reuse. Recycling is one of Umicore's key services, and they distinguish between two types of gold recycling processes: short-cycle and long-cycle.
Through a short recycling loop, Umicore recycles surplus and scrap gold, enhancing the reuse of metal in new products. This gold typically comes from old jewelry and scrap from industry and production, and it is further recycled back into the market, for example, into coins and rings. According to Umicore, about 90% of scrap gold is recycled through this process. A longer recycling process involves more complex stages, such as the recycling of mobile phones and circuit boards. As a result of a more demanding metallurgical process, valuable metals like gold are recovered from these products for further use. The remaining 10% of recyclable gold goes through this longer process.
Read the full article in English/ 14.10.2020, Umicore
Bnn Bloomberg: Investors speculate on the direction of recovery, gold dipped
The gold price has been under pressure for about three days due to a slight increase in real yields: a drop has been seen close to $1900 an ounce as investors speculate on the future of U.S. economic stimulus packages, writes BNN Bloomberg. At the same time, a record number of coronavirus infections were reported in the U.S. According to Bloomberg, approval for a new stimulus package is expected this week, which seems challenging to achieve. Speculation about the package has raised government bond yields and slightly decreased interest in gold.
Read full article in English/ 26.10.2020, Ranjeetha Pakiam, Bloomberg News
This is Jalonomi's weekly review of interesting precious metal news from various sources around the world. Our goal is to provide the reader with a concise and quick-to-read overview of the news on a weekly basis. We particularly focus on news related to investment gold.
