Research On The Financial Property Of Gold

Gold, who once had its moment as currency, played an important role in Gold Standard System. But all the glory was terminated by the Jamaica Agreement which claimed gold no longer a monetary asset. From then on, to most of people, gold becomes an ordinary commodity and has no relation with the financial system. Whether that is true or not?The research covers the period from International Gold Standard System (began around 1870) to today, in which Jamaica Agreement could be seen as a turning point. The conclusion is gold still holds its financial property and the gold market is still a financial market as its leading trait since the facts listed below are found:1. Gold's function as currency is being weakened, which is just an on-going process throughout the Gold Standard System and extending to today. The cause is as a natural resource, supply of gold is bound to be limited and could not catch up with the speed of the surging demand of currency which is a result of the expanding world economy. However, till today, gold has not completely stepped out of the currency world and will not in the foreseeable future as well.2. It is not justified for the non-monetarization of gold to serve as a termination to the Gold Standard System. Basicly, the failure of the system mainly lies in the fact that the design of the system could not adapt to the change and development of the world economy, not the role of gold as currency.3. Owing to the non-monetarization on the law, gold market catches its chance to stretch out, which gives gold its modern definition as financial asset: tool of investment and hedge. The gold market is still mainly a financial market, which is displayed through its relationship with the financial system and the market itself as well.Finally, the paper focuses on the status and function of the market in domestic financial system.