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What are the reasons for gold’s apparent price resilience?

*Financial Times, by Chris Flood, February 15, 2007

“Industrial and dental demand hit a record 458 tonnes last year, rising 5 per cent compared to 2005 and surpassing the previous high set in 2000. The electronics sector reported particularly strong growth, helped by the increasing use of gold in consumer goods such as flat screen television panels and circuitry in mobile phones and MP3 music players.

Demand from the electronics sector increased 11 per cent to 312 tonnes last year.

Gold is a good conductor of both heat and electricity and is specified when performance in circuitry is crucial, such as for car air bags, which increasingly use gold-plated circuit contacts.

Gold is being used in a new range of industrial and medical applications, including nano-technology, which are still in research or early production stages, but which could have an impact on demand in years to come.

It is even being found useful in environmental applications as it can be used in traps to remove mercury from emissions from coal-fired power stations.

Tariq Salaria, of Standard Chartered, said a key support for the market this year would be diversification of foreign exchange reserves by central banks such as Russia’s and China’s seeking to reduce their exposure to dollar-denominated assets.”

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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