The gold market - Italy

Since 2020, the global gold market has been significantly influenced by the COVID-19 pandemic and geopolitical instabilities, such as the Russia-Ukraine conflict, leading to increased investor demand for gold as a safe haven asset. This has contributed to a 39.5% increase in gold price compared to 2018, with 2020 witnessing a drastic reduction in gold demand for jewelry (-42.18% compared to 2018) while seeing a surge in investment demand by 54.4%. Despite these variations in gold applications, overall consumption rose by 18% in the first nine months of 2022 compared to the same period in 2021. China persisted as the top gold producer with an estimated production of 330 tons in 2022, closely followed by Australia and Russia, each with 320 tons. The Italian market showcased a strong gold reserve standing at 2,451.8 tons as of early 2023. Italian gold imports remained higher than exports, as evident from the trade deficit charted between 2018-2022, with Switzerland being the primary trading partner for both imports (35.3% of total) and exports. The Italian gold industry has also seen a buoyant upswing with revenues reaching €13.2 billion in 2021, a 22.1% increase from the previous year, though it faces challenges such as labor shortages. The pandemic’s impact, evolving consumption patterns, especially among young adults (28% between 18-29 years old), and rising household disposable incomes have been pertinent factors shaping the gold market's trajectory since 2020..**Trends in Italy's Gold Market Demand** In Italy, gold's luster is undiminished, with a particularly high profile in investment portfolios and the creation of exquisite jewelry pieces. As a treasure trove of fashion and opulence, Italy's affinity for gold manifests both as a haven for investors and a cornerstone of the luxury goods sector. This dual role is supported by VAT exemptions for gold bars and coins under specific conditions, encouraging its inclusion as an asset in Italian investment strategies. Jewelry remains a dominant force in Italy's gold demand, reflecting the country's deep-seated tradition of producing high-grade luxury items. This sector has evidenced robust performance, particularly with exportation to nations like China and the United States, which are hotbeds for Italian-made gold jewelry. Investments hold the second key position in the hierarchy of gold demand, where the need for secure and low-risk asset options renders gold a preferred choice, especially in times of economic instability. The Bank of Italy's vast gold reserves, amounting to between 2,400 and 2,500 tons—worth approximately 148.8 billion euros—attest to the substantial confidence placed in gold's capacity to bolster financial system stability. Italy's gold trade balance has consistently shown a deficit, with imports outweighing exports. Over the years, this deficit has been accentuated due to heightened national safety concerns and economic uncertainties, leading to an influx of imported gold, particularly from Switzerland. The global strife caused by the COVID-19 pandemic and subsequent geopolitical unrest have only intensified gold's appeal. The surge in investor demand carved a trajectory for gold prices to climb by roughly 40% in 2020 compared to 2018. However, it wasn't all glinting positivity; the pandemic-induced economic downturn led to a sharp decline—over 40% in jewelry and luxury goods—highlighting the dichotomy of gold as both a secure investment and a commodity vulnerable to consumer discretionary spending. In demographic terms, Italy's gold market is an intriguing blend of youth and affluence, with between 25% and 30% of precious metal holders falling within the 18-29 age bracket. Furthermore, gold holders predominantly skew towards female ownership at around 60%, with a significant portion holding at least a master's degree. Household income also plays a pivotal role, as a majority, around 60% to 70% of gold holders, come from middle to high-income brackets. Given these demand determinants, Italy's gold industry outlook appears to strike a fine balance.### Key Players in the Global and Italian Gold Market Landscape The dynamics of the global and Italian gold market are heavily influenced by a variety of actors, each playing a significant role in shaping the industry's trends and patterns. The following are some of the primary market players that stand out in the context of the discussions presented. #### Barrick Gold Corporation As one of the largest gold mining companies in the world, Barrick Gold Corporation significantly impacts the global supply of gold. With mining operations scattered across many countries, Barrick Gold's activities contribute to the overall gold production figures that satisfy the global demand for gold in the technology, investment, and luxury sectors. #### Newmont Corporation Newmont Corporation, another global leader in gold production, competes closely with Barrick Gold in terms of scale and output. It, too, has a broad international presence and its operational efficiencies and mining strategies set industry benchmarks for costs and production that influence the entire market. #### AngloGold Ashanti AngloGold Ashanti is an entity not to be overlooked when considering gold's supply side. With their extraction and refinement of raw materials, they feed into both the physical gold market, catering to the luxurious demands for jewelry, and the financial gold interests seeking investment opportunities. #### Valcambi Shifting focus to the processing of gold, Valcambi emerges as a cornerstone in the precious metals refining industry. The gold bars and other forms refined by Valcambi underpin investor confidence and supply the high-end jewelry makers with the quality materials they demand. #### Argor-Heraeus Joining Valcambi in the field of refining, Argor-Heraeus plays an indispensable role in the transformation of raw gold into forms suitable for both industrial application and investment. Their operations ensure a steady flow of processed gold for various market sectors. #### Comex of the New York Mercantile Exchange (NYMEX) As a pivotal platform in the financial trading of gold, Comex of the NYMEX enables investors from around the world to engage in gold futures markets. Their activities establish market prices and liquidity, which significantly affect both short- and long-term gold pricing and investment trends. #### London Bullion Market Association (LBMA) Responsible for setting the twice-daily gold benchmark price, LBMA is authoritative in its pricing of gold. Its members consist of banks, traders, and refiners alike, orchestrating one of the most crucial marketplaces for physical gold trades that the global gold jewelry and central banking sectors depend on. #### Banco d'Italia (Bank of

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

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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

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