World price of gold
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www.ibisworld.com | 1-800-330-3772 | [email protected] IBISWorld Business Environment Report World price of gold July 2015 Estimated Value in 2015: $1,208 per troy ounce 2010-2015 Compound Growth: -0.3% Forecasted Value for 2020: $1,358 per troy ounce 2015-2020 Compound Growth: 2.4% The world price of gold is represented by the average opening cost of one troy ounce of pure gold on the London Bullion Market. Annual figures are equally-weighted averages of monthly averages. Data is sourced from the London Bullion Market Association. Current Performance Gold has been scarce over the past decade due to the ramifications of the gold standard abolition. The gold standard was finally abolished by the last of world currencies in the 1970s, and as a result, central banks began selling off the reserves they no longer needed to keep. By the late-1990s, the central banks slowed their sales as they had reduced their gold reserves to more acceptable levels. Demand for gold continued growing, but a major supplier, large banks, stopped selling gold, leaving gold mines as the only supplier. However, the two decades of excess gold supply had induced low investment in gold mining and refinement. This caused steep increases in the price of gold because a several year gap exists between investment in a gold mine and a resultant increase in production. In addition, world deposits have run low; meaning the gold that is left in the earth is difficult and expensive to mine. These conditions combined to cause the steep increase in price between 2001 ($271.10 per troy ounce) and 2007 ($696.85 per troy ounce). World price of gold
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IBISWorld Business Environment Profiles July 2015
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July 2015
www.ibisworld.com | 1-800-330-3772 | [email protected]
IBISWorld Business Environment Report World price of gold
July 2015 Estimated Value in 2015: $1,208 per troy ounce 2010-2015 Compound Growth: -0.3% Forecasted Value for 2020: $1,358 per troy ounce 2015-2020 Compound Growth: 2.4% The world price of gold is represented by the average opening cost of one troy ounce of pure gold on the London Bullion Market. Annual figures are equally-weighted averages of monthly averages. Data is sourced from the London Bullion Market Association. Current Performance Gold has been scarce over the past decade due to the ramifications of the gold standard abolition. The gold standard was finally abolished by the last of world currencies in the 1970s, and as a result, central banks began selling off the reserves they no longer needed to keep. By the late-1990s, the central banks slowed their sales as they had reduced their gold reserves to more acceptable levels. Demand for gold continued growing, but a major supplier, large banks, stopped selling gold, leaving gold mines as the only supplier. However, the two decades of excess gold supply had induced low investment in gold mining and refinement. This caused steep increases in the price of gold because a several year gap exists between investment in a gold mine and a resultant increase in production. In addition, world deposits have run low; meaning the gold that is left in the earth is difficult and expensive to mine. These conditions combined to cause the steep increase in price between 2001 ($271.10 per troy ounce) and 2007 ($696.85 per troy ounce).
World price of gold
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The price rise was exacerbated by the global financial crisis and recession that began in 2008. Investment in gold as a commodity increases dramatically during economic downturns, as it is seen as more resilient and less risky than world currencies. On the other hand, during economic expansion, investment moves away from gold toward the higher returns of riskier assets. Due to investors fleeing to the safety of gold due to the economic uncertainty, the average gold price jumped 25.2% in 2008, 11.4% in 2009 and 26.1% in 2010. Continued insecurity among investors caused by public debt concerns in the European Union and the United States, kept the price of gold rising in 2011 and 2012 at 28.1% and 6.3%, respectively, leading to a yearly average of $1,669 per troy ounce in 2012. However, these trends slowed in 2013 as the global economy slowly strengthened, the United States continued to experience positive job growth and Europe enacted measures to reign in the debt crisis. The price of gold, in turn, fell 15.4% in 2013 and another 10.2% in 2014. Consequently, the world price of gold is anticipated to decrease at an annualized rate of 0.3% over the five years to 2015. Outlook IBISWorld forecasts the price of gold to increase in the five years up to 2020, albeit at a modest rate. Once the world economy begins to stabilize and fully shake off the lingering effects of the recession, investors will move away from gold toward assets with higher returns. As a result, growth will be relatively muted during the next five years. In particular, as advanced economies shake off the recession, more investors will invest in equities and bonds at the expense of gold. Nevertheless, over the long-term though, the scarcity of gold deposits will again push the price up over the remainder of the forecast period, causing the price to increase at an annualized rate of 2.4% over the five years to 2020.
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1980 1985 1990 1995 2000 2005 2010 2015 2020
World price of gold
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Year $ per troy
ounce % Change
1980 607.88
1981 460.02 -24.32
1982 375.91 -18.28
1983 424.51 12.93
1984 360.46 -15.09
1985 317.39 -11.95
1986 367.67 15.84
1987 446.79 21.52
1988 437.12 -2.16
1989 381.66 -12.69
1990 383.70 0.53
1991 362.26 -5.59
1992 343.72 -5.12
1993 359.81 4.68
1994 384.06 6.74
1995 384.16 0.03
1996 387.72 0.93
1997 331.14 -14.59
1998 294.22 -11.15
1999 279.05 -5.16
2000 279.28 0.08
Year $ per troy
ounce % Change
2001 271.10 -2.93
2002 310.20 14.42
2003 363.68 17.24
2004 409.33 12.55
2005 444.91 8.69
2006 604.71 35.92
2007 696.85 15.24
2008 872.54 25.21
2009 972.14 11.41
2010 1,225.46 26.06
2011 1,569.58 28.08
2012 1,668.50 6.3
2013 1,410.80 -15.45
2014 1,266.34 -10.24
2015 1,207.91 -4.61
2016 1,253.23 3.75
2017 1,312.77 4.75
2018 1,330.78 1.37
2019 1,348.99 1.37
2020 1,358.43 0.7
2021 1,367.94 0.7
World price of gold
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Disclaimer This product has been supplied by IBISWorld Inc. (‘IBISWorld’) solely for use by its authorized licenses strictly in accordance with their license agreements with IBISWorld. IBISWorld makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein. Copyright in this publication is owned by IBISWorld Inc. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the material in this publication – in papers, reports, or opinions prepared for any other person – it is agreed that it will be sourced to: IBISWorld Inc.
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