Gold

In response to the soaring price of gold (metal), there has been a boom in the buying and selling of gold.  We’re not talking about just the futures trading of gold, but in Japan gold, coins and other gold accessories lying in safes and homes is being bought and sold.  When to sell and when to buy has become the independent decision of the agency acting as sales broker.  It appears that only in Japan is personal selling prevalent, while in other countries there are many people who want to purchase gold before the price increases further.  In response to the fluidity of recent currency values, from now many of the world’s wealthiest people will be purchasing gold when the price is expected to rise.  For them, gold is viewed as a “risk free asset.” 

So how much has the price of gold increased?  Looking at the last five years, the price has approximately doubled.  If we do a quick calculation, the price in 2006 with a yen base was 2300 yen/g and at the present time (2011) is 4600yen/g.   However, due to severe price flucuations, although the price rose 1.5 times in August of 2008, it also fell sharply in the same month.  No spiraling prices.  Yet, because of the recent surge in buyers, prices are skyrocketing and last week on the NY market 1 ounce (28.35g) exceeded USD 1900 for the first time.  Citigroup raised the price forecast for gold for 2012 to 1 ounce at USD 1650 and for 2013 to USD 1500.  The previous forecast had been 2012 at USD 1325 and 2013 at USD 1225. 

Countries famous for producing gold are South Africa, America, Australia and China.  However, the only one with increasing output is China.  In 2010, China surpassed South Africa to become the world’s largest producing country.  Besides these countries, Indonesia and Peru are also coming up, and attention is also being paid to North Korea.  It’s said that North Korea has large reserves of other minerals besides gold.   

Despite this, gold is said to be a mineral that will be depleted twenty years from now.  The amount of gold reserves is between 50,000 and 60,000 tons.  The remaining amount of gold is about the amount of one 50-meter swimming pool.  From now, there are only about 4 pools worth remaining in the world, including the current reserves.  

As you know, gold is used in many products.  According to the Japanese National Institute for Materials Science (NIMS), the cumulative amount of gold, silver, lead and tin used is expected to exceed the present reserves by 2020.  *In the report, the cumulative amounts of other mineral resources besides those listed above are also expected to equal the current reserve amounts or exceed them.  Because of this, Japan is paying attention to “urban mines.”  By recycling old electrical appliances you can recycle mineral resources.  The amounts of gold, silver, lead and indium lying in “urban mines” is the most in the world, and the amounts of copper, platinum and tantalum rank as 3rd in the world for country resources.  However, there are currently many challenges, such as the fact that one third of cellular phones cannot be recycled.  Also, 
foreign countries target Japan’s “urban mines” and recover old electrical appliances and then take them out of the country.  The country called “the Gold Country-Jipang” by Marco Polo long ago has changed and become the talked about “Re-Gold Country.”  In the near future, it’s rumored that the Japanese government will make the recycling of old electrical appliances mandatory. 

It’s a mini gold rush like the panning for gold dust was in the United States.  There is a strong element of leisure and so right now gold is taking the world by storm.  Just now (perfect timing) I got a phone call asking, “Would you like to sell some gold?”  In Japan, corrupt buyers of precious metals are increasing and becoming a problem.  Tanaka Precious Metals has a recycle business called Re:Tanaka and the purchase prices are listed on the homepage.  Because the prices fluctuate depending on the day, it’s recommended that individuals check before selling.

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