Researching Supply and Demand Balance of Gold as a Precious Metal and Economic Value

Abstract

Gold has always attracted people's attention, and due to its physical and chemical properties discovered over time, it has begun to be used in different areas today. Gold, which has been used as money in commercial relations throughout history and as jewelry in the jewelery industry, has now become used in many areas of life, including in the electronics industry and space industry due to its perfect conductivity, in decoration due to its dazzling appearance, and in healthcare due to its stainless feature. In this article, it is discussed how the balance between the supply and demand of gold is formed in the world as a precious metal and economic value. In this context, first of all, why gold is so popular and demanded in all geographies; by explaining the features that make gold a precious metal, which are not found in other metals, which can be listed as inelastic supply structure, limited production, use of gold as a reserve tool by central banks in the world, and absence of another metal with similar qualities, which distinguish gold from other precious metals and make it stand out, the life cycle of gold mines, which is basis of limited supply of gold, in other words, how gold is extracted to the earth, is the processes that can be expressed as research, development, operation, closure and decommissioning of a gold mine and reclamation after closure, and how the recycling of this precious metal is ensured and its stages, contributions of gold mines to country's economy are explained. The factors that make up the demand side are classified according to sectors, areas of use, geographical diversity, gold markets and flows, and the factors that make up the difference between supply and demand of gold are revealed.