The gold market - Italy

Since 2020, the global gold market has experienced a fluctuation due to the COVID-19 pandemic and geopolitical uncertainties, particularly the Russia-Ukraine conflict. These events have heightened investor demand for gold as a safe haven asset, leading to significant changes in the market dynamics. In 2020, gold production halted momentarily but resumed growth, with an estimated production of 3,100 tons in 2022. China, Russia, and Australia are the leading gold producers, despite Australia having the largest reserves. The demand for gold sees jewelry as the largest consumer at 47%, followed by central bank reserves and investment bullion. 

Italian trade balances in gold have consistently demonstrated a deficit, with the value of imports exceeding exports, particularly with Switzerland as a key trading partner. Gold's price trajectory has been ascending, with the London gold price marking a 29.3%, reflecting economic and political turmoil. The Italian precious metals market, while featuring a growing number of enterprises and employees, indicates a steady increment in revenue, achieving €5.3 billion with further growth in subsequent years.

Trends in the Italian Gold Market

In recent years, the Italian gold market has exhibited dynamic shifts in demand and supply patterns influenced by various factors ranging from economic uncertainties to fashion trends. The allure of gold as a safe haven asset has particularly resonated in Italy, contributing to a notable surge in gold investments. Interest in gold bars and coins has intensified, largely driven by their exemption from VAT and recognition as low-volatility, low-risk investments. Both individual investors and the Bank of Italy, which holds between 2,400 and 2,500 tons of gold, have demonstrated a strong preference for this precious metal, utilizing it to bolster financial stability and national security. The Italian jewelry sector, deeply rooted in the country's luxury and fashion heritage, significantly contributes to the utilization of gold. Reports indicate a robust recovery in jewelry exports, exceeding values of €9 billion, with the United States solidifying its position as the premier market. Nevertheless, challenges persist, especially regarding the availability of skilled labor, which could potentially restrict growth within the industry. On the technological front, the economy has experienced growth in the electronics sector, which incorporates gold in various applications. Boosted by legislative support and ambitious goals set forth by the European Commission, the industry anticipates further advancement.

Despite having no native gold reserves, Italy engages in international trade to satisfy its domestic demand. A deficit marked by higher imports than exports is evident, with countries like Switzerland playing a crucial role in both capacities. Worth mentioning is the impact of the COVID-19 pandemic, which has magnified investor attraction towards gold and influenced price trends, witnessing an increment of approximately 30%. This heightened investment activity in gold starkly contrasts with the subdued demand experienced by the luxury goods sectors, where gold consumption for production experienced a decline of nearly 40% in 2020. Demographically, the Italian gold market sees the most significant metal holding within the youngest age bracket, with individuals aged between 18 and 30. The majority of owners are women, encompassing over 60% of holders, and a substantial proportion of holders possess advanced educational qualifications such as master’s degrees. Household income has also shown an upward trend, with regions in the north of Italy enjoying higher disposable income compared to their southern counterparts. Through this diverse and intricate interplay of economic, social, and market factors, the demand for gold in Italy paints a complex yet intriguing picture of value, tradition, and strategic positioning in the context of the global and national markets.

Key Players in the Global and Italian Gold Market Landscape

The gold market, as described in the extensive overview provided, is shaped by the contributions and interactions of numerous market players ranging from mining companies to financial institutions, and from jewelry manufacturers to central banks. Additionally, technological advancements and the luxury goods sector further inhabit this diverse ecosystem. Among the key actors within this market, there are several notable companies that have a significant impact on how the market functions and evolves.

• Mining Companies : As the primary sources of gold production, mining companies are indispensable to the market's supply side. Companies like Newmont Corporation, Barrick Gold, and AngloGold Ashanti are among the world's largest gold mining operations, consistently contributing substantial quantities of gold to meet global demand. Their activities, from exploration and extraction to ore processing, fundamentally determine the availability and pricing of gold on a worldwide scale.
• Refineries : At the nexus of gold production and distribution are refineries, which purify and prepare raw gold for various uses. Valcambi, Argor-Heraeus, and PAMP S.A. are some of the most prominent names in gold refining, providing services that ensure the transformation of raw materials into market-ready forms like bars, coins, and ingots.
• Bullion Dealers and Distributors : These entities are crucial for providing access to physical gold for investors and consumers. Firms such as BullionVault and The Royal Mint offer a range of gold products and often operate online platforms that facilitate the easy purchase and sale of gold, catering to both individual and institutional clients.
• Jewelry Brands : Renowned for their exquisite craftsmanship, brands like Bulgari and Cartier not only feed consumer demand for luxury items but also significantly contribute to the demand for gold as a raw material in the production of high-end jewelry. As trendsetters, these fashion houses have the power to influence consumer preferences and, consequently, the demand dynamics in the gold world.
• Central Banks : As institutional behemoths with the capacity to shape macroeconomic policies, central banks hold vast reserves of gold, which can stabilize or stimulate markets as needed. The Banca d'Italia, for instance, is noteworthy for holding one of the largest national gold reserves, emphasizing gold's role as a strategic financial asset.
• Financial Institutions and ETF Providers : Investment banks and funds create financial products tied to gold, such as exchange-traded funds (ETFs), which track the price of gold and offer investors exposure to gold price movements without the need to hold physical gold.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 13/07/2023

Summary and extracts

List of charts

• Countries with the largest gold mine reserves
• World gold production
• World gold mining production
• Overall gold consumption per application
• Central bank gold reserves
• Exports, imports, raw, semi-finished and powdered gold Coverage rate
• Main countries by export value of gold
• Main countries by value of gold imports
• Gold demand statistics
• Disposable income per capita of households
• Age of precious metal holders
• Monthly gross household income of precious metal holders
• Gold sector trends
• Electronic components turnover
• Gold Price (LBMA Gold Price)
• Gold price
• Turnover and production value of precious metals
• Number of enterprises and employees in the precious metals market
• Legal form of enterprises active in the production of precious metals
• Medals and coins sold
• Costume jewelry items produced and sold
• World gold mining production