Abstract
It is argued that precious metals function as an attractive investment means for hedging in the period of appearing high liquidity risks of other financial assets. There was revealed the rationality of using precious metals not only for protecting from high risks and also for profit making. It was established, that favoring the development of the market of precious metals improves the financial-investment climate of a country. Precious metals function as a valuable asset that improves the credit trust level and prevent crises of efficiency, liquidity and default. There is grounded the influence of globalization on functioning of the world market of precious metals and their investment attractiveness. Factors that influence the development of the precious metals market are determined. The role of price formation in functioning and stability of the precious metals market is determined. There was argued, that the mechanism of price formation – is a multi-factor process; precious metals are indicators of the general state of world economy: gold draws the greatest attention of investment-seeking economic agents; platinum price indicates the state of economic and financial processes to the date; silver and palladium are found to be not elastic and highly dependent of demand created by industrial economic entities; gold is regarded as the financial asset of the highest liquidity level in the structure of gold and currency reserves across countries worldwide, ten countries keep leading positions, most of them demonstrate stable indices. The analysis of the dynamics of prices and modern tendencies at the world precious metals market allows to reveal their functional destinations as a means for determining a cost limit of a good, investment instrument, provident fund of the money system of a state, means of accumulation and creation of treasures, we can conventionally separate direct and intermediate factors that have the most influence on price formation of one or another precious metal.
Highlights
IntroductionPrecious metals (gold, silver, platinum, palladium) is a type of financial assets that has enough causes to be one of most popular investment instruments
Precious metals is a type of financial assets that has enough causes to be one of most popular investment instruments
Among main ones we can separate: institutional business, readiness of national markets to work with precious metals, adaptability of national regulatory mechanisms to world tendencies of financial liberalization and openness, activity of investors, volume of gold and currency reserves, currency fluctuations, use of trade and investment protectionist arrangements by countries and so on
Summary
Precious metals (gold, silver, platinum, palladium) is a type of financial assets that has enough causes to be one of most popular investment instruments. The development of this segment of the financial market directly influences financial-investment possibilities of a country that can be realized through both own financial institutions and correspondent structures with the foreign capital. Precious metals are an important reserve asset that increases political, external economic and social advantages of one or another country at the international arena. At the same time precious metals as a main liquid and investment resource of a country are characterized with functional binarity, because they can be used as both raw materials for production and as an investment instrument
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