| There has been a long history from since human began to know and use gold. Gold has always been regarded as the symbol of wealth. After acting as money in commodity society for a long time, gold had retreated from circulation gradually with the development of modern economy within last few decades. But the demonetization of gold did not turn it into a simple commodity; gold still plays an important role in the financial field today.This paper begins from the analysis of value of gold from the perspective of investment. Gold has an unmatched charm that will distinguish it from the other commodities and financial products, which includes that: gold is a reserve of value, it is the last resort in the time of turbulence; the correlation between gold and other financial products is so low that including gold into portfolio will reduce the total risk dramatically; the liquidity of gold market is very high, which can meet the demand of the investors. This paper also does quantitative analysis, which compares gold to main stock indexes, bonds and foreign currencies of their earnings and risks. Its conclusion is that: gold is the best products of them.The special value of gold suggests we have to mend our pace to develop the gold market. The gold markets in most developed countries are mature, but in China, gold has been always under strict control for a long time. Only in the last few years, Chinese government has released the control on gold gradually. In 2002, Shanghai Gold Exchange came into existence, symbolizing the first pace of the development of Chinese gold market. The investment function of Chinese gold market has not displayed well. We should utilize others mature gold markets' experience. This paper propose some suggestions to improve Chinese gold market. |
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