Coping Strategies Of The Gold Market And Gold Enterprises In China

Due to its rarity, specialty, and valuableness, gold has long been used for reserve, currency, and jewelry. Gold also has a broad application in industries for its remarkable physical attributes.As the opening of Chinese gold market, the Central Bank's exclusive operation policy for gold will be abrogated, and gold will be able to be sold or purchased freely in the market. The opening policy of gold brings Chinese gold industry challenges as well as opportunities. And the gold market price mechanism became a main issue that Chinese gold enterprises have to study.As common commodities, gold prices are determined by the supply and demand in the market. Because gold have the attributes of both commodity and currency, and its price fluctuates prominently, the supply and demand of gold can be divided into two main categories, the commodity supply and demand, and the investment supply and demand. There are many factors that affect the gold price. The production of gold, and consumption of gold for jewelry determines the commodity supply and demand of gold, and they have a long-term effect on the gold prices. The investment supply and demand is easy to be influenced by foreign exchange rate, interest rate, financial market situation, gusty events and the like. These factors can have both short-term and long-term impacts on the gold prices.The opening of gold market confronts our gold industry especially the gold producer with lots of new problems and new difficulties. The gold enterprises should enlarge their scale thought merges and acquisitions to improve their capability of taking risk. Gold companies could acquire competitive advantage by the tools of human resource management, and function shifting should be made in the human resource department as soon as possible. Companies could use forward contracts, futures, options and other derived tool to cover the risk of price fluctuation.