StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Gold buying trends and investment in saudi arabia - Research Paper Example

Cite this document
Summary
As such, majority of the investors in Saudi Arabia do not regard gold as a portfolio benefit since they focus more on trading with stocks (Pillkahn 2008). Such a…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.9% of users find it useful
Gold buying trends and investment in saudi arabia
Read Text Preview

Extract of sample "Gold buying trends and investment in saudi arabia"

Gold Buying trends and investment Gold buying trends and investments in Saudi Arabia Saudi Arabian investors show awareness on gold, but they consider it as a portfolio diversifier (Gandel 2003). As such, majority of the investors in Saudi Arabia do not regard gold as a portfolio benefit since they focus more on trading with stocks (Pillkahn 2008). Such a situation is attributed to the fact that investors may be lacking awareness on the potential benefits of gold. Gold funds are popular in Saudi Arabia among individuals interested in the investment (Lee et al. 2009). Such funds come from the relationship managers, as well as experts’ recommendations.

These conditions illustrate market failure since the investors are not aware of the possible opportunities (Trivedi & Behera 2012). Real estate investment is the most preferred option among the Saudi Arabian investors in comparison to gold (Smith 2011). Such occurs since the interest rates are low, the environment has a higher liquidity, there is a population increase and the demand for housing is high (Kelly 2011). Moreover, the government does not have adequate housing projects, which indicates why investors venture on this opportunity of real estate investment.

On the other hand, women depict a viable market for the gold since they create a strong demand for the commodity. Women need gold for gifts and jewelry they represent during ceremonies (Rivlin 2009). However, sudden increase in the price of gold makes women not to buy jewelry and focus on other alternative commodities. Nevertheless, it is anticipated that as the population increases, the demand for gold will increase. Since ancient civilization in the Hejaz area, Jeddah creates a unique gold market (Karunagaran 2013).

This is because Jeddah has a sea port and acts as a main gate to al medina and Makah, which makes it a strategic market for gold on annual basis during the hosting of the pilgrims. Saudi Arabian Investors are also oriented on economic activities, which are related to mineral fuels. Such occurs since the country is involved with the exportation of mineral fuels (Middle East Monitor: Gulf 2014). Other investors focus on foreign direct and indirect investments because they regard such investments as lucrative in terms of the returns on their investments and earnings on profits.

Their major focus of foreign investments is in the United Kingdom, Japan, United States, Germany, France and Switzerland (Erb & Harvey 2013). Investors favor other alternative investments instead of gold because they consider such investments to have low risks in comparison to gold trade investment. Thus, these investors are risk aversive. The poor market for gold in Saudi Arabia acts as the key factor towards the reduced level of investment in gold (Plunkett 2010). Such occurs since investors’ survey the market performance of commodities prior to investment (Brown 2013).

The high cost of gold makes it lose customers and demand, which imply that investors can easily project for poor sales of the commodity, which will subject them to market loses (Suresh 2012). In addition, Saudi Arabia offers a smaller market for gold, which makes the commodity to have less value among the citizens. References Brown, LR 2013, Food, Fuel, and the Global Land Grab, Futurist, 47, 1, pp. 21-26, Academic SearchPremier, EBSCOhost, viewed 9 June 2014.Erb, C, & Harvey, C 2013, The Golden Dilemma, Financial Analysts Journal, 69, 4, pp.

10-42,Business Source Complete, EBSCOhost, viewed 9 June 2014.Gandel, S 2003, THE OTHER BLACK GOLD, Money, 32, 8, p. 42, Business Source Complete,EBSCOhost, viewed 9 June 2014.Karunagaran, Aa 2013, Global Crisis And The Demand For Gold By Central Banks: A Review EssayWith Reference To India, Journal Of International Commerce, Economics & Policy, 4, 1, p. -1, Business Source Complete, EBSCOhost, viewed 9 June 2014.Kelly, RC 2011, Saudi Arabia: Forecast Brief - 2011 Edition, Countrywatch Forecast Brief – SaudiArabia, pp.

1-25, Business Source Complete, EBSCOhost, viewed 9 June 2014.Lee, M, Roberts, R, & Kraynak, J 2009, Cross-Cultural Selling for Dummies, Hoboken, N.J.: Wiley,eBook Collection (EBSCOhost), EBSCOhost, viewed 9 June 2014.Middle East Monitor: Gulf 2014, Middle East Monitor: the Gulf, 14, 1, pp. 1-12, Business SourceComplete, EBSCOhost, viewed 9 June 2014.Pillkahn, U 2008, and Using Trends and Scenarios as Tools for Strategy Development: Shaping theFuture of Your Enterprise, Erlangen: Publicis Corporate Pub, eBook Collection (EBSCOhost), EBSCOhost, viewed 9 June 2014.

Plunkett, JW 2010, The Next Boom: What You Absolutely, Positively Have To Know about the Worldbetween Now and 2025, Houston, Tex: BizExecs Press, eBook Collection (EBSCOhost), EBSCOhost, viewed 9 June 2014.Rivlin, P 2009, Arab Economies in the Twenty-First Century, and Cambridge: Cambridge UniversityPress, eBook Collection (EBSCOhost), EBSCOhost, viewed 9 June 2014.Smith, P 2011, The Gold Rush: over or ongoing?’ Middle East, 419, pp. 31-35, Academic SearchPremier, EBSCOhost, viewed 9 June 2014.

Suresh, A 2012, An Analytical Perspective of Global Melt Down Vis-A-Vis Perceptible Escalation inGold Price with Special Reference to India, Journal Of Finance, Accounting & Management, 3, 2, pp. 79-95, Business Source Complete, EBSCOhost, viewed 9 June 2014.Trivedi, P, & Behera, S 2012, The Macroeconomic Determinants Gold Prices in India: An ARDLApproach, Journal Of International Economics (0976-0792), 3, 2, pp. 4-26, Business Source Complete, EBSCOhost, viewed 9 June 2014.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Gold buying trends and investment in saudi arabia Research Paper”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1649439-gold-buying-trends-and-investment-in-saudi-arabia
(Gold Buying Trends and Investment in Saudi Arabia Research Paper)
https://studentshare.org/finance-accounting/1649439-gold-buying-trends-and-investment-in-saudi-arabia.
“Gold Buying Trends and Investment in Saudi Arabia Research Paper”, n.d. https://studentshare.org/finance-accounting/1649439-gold-buying-trends-and-investment-in-saudi-arabia.
  • Cited: 0 times

CHECK THESE SAMPLES OF Gold buying trends and investment in saudi arabia

Business LAw 1

ADC Company Limited Memorandum of Association 2012 1st The name of the of the company is the ADC Company Limited 2nd The registered headquarters of the corporation will be located in Dubai (UAE) 3rd The objects for which the company is established are buying, exporting of the motor vehicle spare parts amid such places as the corporation may from time to time decide and the responsibility of other things as is conducive to the attainment of the above object....
4 Pages (1000 words) Assignment

Description of Internship Process

# New skills/knowledge acquired As an international intern I was able to gain a sound investment portfolio that is broadly diversified and consistent with the main investment objectives of growth, income, or a combination of both, for the purpose of ensuring business and economic growth for the organization and its local and international customers....
4 Pages (1000 words) Essay

The Firms Competing in the Market

in saudi arabia, the oil cost to the government is extremely low but they charge a good amount of price in the market to encourage more competitors in the market.... The governments in order to finance such large investments often keep high initial consumer prices to make sure that more and more companies enter the market and total investment in the country increases as it has many macro-economic advantages.... However, when other firms like Nokia and Blackberry decided to introduce their touch screen versions of cell phones they kept prices lower than iPhone in order to tempt consumers to try their product rather than buying the already established brands of iPhone....
1 Pages (250 words) Essay

Scotland as the Brand

Tourism is one of the growing industries of the world as more and more people across the world find more leisure time and dedicate their leisure time to travel and tourism.... In Europe, Scotland can position itself as a unique brand for tourism if the marketing managers of various… Towards this purpose, there are several aspects which marketers must look at....
13 Pages (3250 words) Essay

Sovereign Wealth Funds

The IMF's  October 2007 Global Financial Stability Report states that there are five major types of SWFs namely; the stabilization funds, savings funds for future generations, reserve investment corporations, development funds and contingent pension reserve funds, where each serve a distinctive and well-defined purpose.... The aim of SWFs among others is to manage government wealth so that funds do not remain static thus balancing investment with savings....
8 Pages (2000 words) Coursework

Fleet Planning

nbsp;… After-Sale service provided by the aircraft manufacturer would also be another factor that could charm the buying trend of any particular aircraft.... More quick and responsive After-Sale service would definitely be admired by the airline operator buying any particular aircraft....
7 Pages (1750 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us