Role Of Financial Markets In A Modern Economy

Role Of Financial Markets In A Modern Economy This essay examines the assumption, that a large financial sector consistently benefits the real economy. It has been acknowledged that the financial sector, not to mention some of its components, may sometimes become too large. It can end up posing a threat to both economic and financial stability, so the essay develops our understanding of where the optimal threshold lies. The regulatory measures and addresses the problem best: namely, preventing the financial industry from becoming too large and taking excessive risks, leading to the emergence of bubbles, and to the production of complex and dense financial instruments. And we should avoid imposing restrictive measures that will prevent the financial sector from channelling resources towards productive opportunities. In doing so, we need to make sure that our measures target non-traditional financial markets as much as traditional banking, in order not to encourage regulatory arbitrage and a return to business as usual outside the auspices of regulators. Financial innovation can impose a threat to both economic and financial stability, so we have to enhance our understanding of where the best possible threshold lies in determining the size of the financial systems. There is an emerging consent that while financial markets are generally conducive to economic growth, in the run-up to the recent crisis they were operating on an extreme scale. This essay will converse around four main points: firstly that efficient financial markets enhance growth, however, if they grow too large, then they may lead to a misallocation of resources and cause costly crises. Secondly, facts will be presented showing that in the build-up to the crisis, the size of the financial sector outgrew its trend. Thirdly, identification of some of the main reasons why this occurred and argued how to avoid that such imbalance again. To this end, regulation and supervision can play an important role. Lastly, while ensuring that the financial sector does not grow beyond its optimal size, the new regulatory framework should not reach the point of financial domination. The knowledge from recent industrialised countries has relatively claim, that deeper financial markets improve economic efficiency, lead to a better allocation of productive capital, and increase long-term economic growth. However, the frequent financial shocks associated with dynamic financial industries, and in particular the recent economic crisis, also highlight the role large financial markets play in downside risk. This mutually shows that there is a trade-off between a highly vibrant financial sector and the overall stability of the financial system. (Ranciere, R., Tornell, A., and F. Westermann, 2008) The first part of this essay will argue the aspects of the financial sector which can give us key insights into this trade-off is its size. When reasonably large, financial markets promote economic efficiency by recognising productive opportunities and transforming savings into the investment vitally to finance those opportunities. However, when they become too large, relative to what is implied by economic fundamentals, problems like financial complexity, poorly understood financial innovation, flock behaviour, and endogenous risk-taking to name just a few suddenly outweigh the benefits. The recent financial and economic crisis is a stark example of that. The pre-crisis period was characterised by the growing size, complexity and connectiveness of financial markets, with ensuing unfavourable effects on the global economy. In order to address the problem, regulatory measures are being taken to impose limits on the tendency of the financial sector to create downside risk. But a fine balance needs to be reached: these measures must be effective but not penalizing; they need to address the core of the problem without excessively limiting the ability of financial markets to sustain economic growth. Before going on the second point, it is perhaps useful to explain why we still need a large and dynamic financial industry. In general, deep and efficient financial markets improve economic performance both by raising the level of growth and by allocating productive capital more efficiently, ultimately generating benefits for the society as a whole( Rajan, R., and L. Zingales, 1998) . The difference is particularly noticeable when it comes to the financing of innovative ideas, where the much larger US venture capital industry has been credited over the years with the emergence of whole new industries and such innovative corporate giants as Microsoft, Cisco Systems and Google. All this leads us to the second point of the essay, which is how the size of the financial sector outgrew its trend. Most economists think the relationship between finance and growth as one in which more is better. However, the recent crisis has revealed that a financial sector which goes beyond a certain threshold (or breaking point) can harm the economy and society as a whole. In particular, an oversized financial industry tends to intensify information asymmetries, moral hazard problems, and the hunt for yield, leading to excessive risk-taking and over-leveraging of the system. The events of 2007-2008 suggest that when financial sectors are too large, the allocation of resources may become inefficient. Numerous examples of misallocation were associated with the credit growth of the early 2000s as well, of which the expansion of the US sub-prime mortgage market is just the most obvious one. We can think of examples in Europe too for instance, growth in Spain relied for years on an ever-expanding real estate sector fuelled by increasing borrowing.( Popov, A., and P. Roosenboom, 2009) After discussing the negative penalties on financial stability and economic growth that a too large financial sector can generate, in this section I will analyse available evidence to show that the financial industry as a whole has grown to a sub-optimal size. It is important to note that this is not due to rising compensation in traditional financial sectors like credit and insurance, but due to the large increase in compensation in non-traditional financial activities like investment banks, hedge funds and the like (Figure 1) below. This is another reason why any changes to the regulatory environment aimed at preventing systemic crises in the future will have to deal not just with the traditional banking sector, but with the so-called shadow banking sector as well. Unfortunately, it is not clear whether the crisis has imposed discipline on the financial sector. In theory, one would have expected the crisis to have resulted in, for instance, a new bonus structure with smaller rewards for short-term behaviour, less proprietary trading and more trading on own resources, greater aversion to the accumulation of debt, etc. To find possible remedies to the excessive size of the financial sector, it is important to understand the factors that have allowed it to grow too big, which leads us to the third part of the essay. As mentioned before, one obvious reason is excessive profits. Not only did rapid financial innovation enable Wall Street to encourage risk-taking through record pay, but this process also diverted human resources away from more traditional productive occupations towards the shadow banking system. Of course, an equally important reason for the increase in the size of the financial sector is the global accumulation of savings over time. It has been argued that the pre-crisis boom in US real estate and securitisation markets reflected high foreign demand for safe US assets resulting from excess world savings in the context of persistent global imbalances.( Caballero, R., and A. Krishnamurthy, 2009) According to this interpretation, foreign asset demand not only pushed down the risk-free interest rate in the US but also compressed the risk premier on risky assets. The low cost of financing, in turn, fostered an increase in the level of leverage of the domestic financial sector which exacerbated systemic risk While the recent increase in the profits of the industry was certainly due to improved financial innovation and technology, it can also be attributed to the higher risks that the financial sector undertook.(Biais, B., Heider, F. and M. Hoerova, 2010)By limiting these risks, it will be possible to reduce the size of the financial sector as well. For instance, suppose that risks decrease because of limits to leverage. This may imply that profits will go down as well. As a consequence, the financial sector will attract fewer resources, private capital will flow to more profitable industries, and its size will decrease. A natural question is how the new regulatory framework will affect economic growth. This question will answer the final part of the essay. It is necessary to ensure financial stability and restrain excessive credit, at the same time this process should not go too far and impair economic growth. There is substantial macro level evidence that the depth of the credit markets measured alternately as liquid liabilities and commercial bank credit to the private sector is associated with higher economic growth. (King, R., and R. Levine, 1993.) Changes in the supply of credit, both in terms of volumes and credit standards, have been shown to have a significant effect on real economic activity through business lending; the evidence is stronger for the euro area than the US. Studies that have gone into the mechanisms of this effect have generally concluded that the positive effect of credit markets on growth comes from reallocation of investment from dying to booming sectors, from higher rat es of new business entry, and from higher growth of industries consisting mainly of small firms. As I mentioned above, the expansion of sub-prime lending clearly imposed a negative externality on the whole economy, and so in hindsight regulatory measures that would have prevented such credit expansion could in fact have been beneficial. To summarise, capital requirements, and leverage ratios serve well to illustrate the trade-off between stability and growth as mentioned at the beginning. The examples provided earlier show that the costs incurred when an oversized financial system unwinds are very large and outweigh any pre-crisis gains. Therefore, practical regulatory actions are to restore the balance between stability and growth is perfectly justified. Conclusion Financial markets are central players in a dynamic modern economy, channelling resources from savers to borrowers and allocating them to productive investment opportunities. At the same time, our experience in the past decade has highlighted the dangers of allowing financial sectors to become too large. In doing so, negative developments like the hunt for rents, the propensity to herd and create bubbles, the misalignment of incentives, and the production of complex innovative financial instruments may outweigh the benefits of finance. Given the obvious negative impact of an excessively large financial industry, we keep asking ourselves whether limits should be imposed on the size of the financial sector itself. It must be clear from the evidence that has been presented that the answer to this question is yes. However, it is also essential to make sure that we do not repress financial markets to the point of jeopardising their contribution to growth. Therefore, the measures outlined are aimed at making the industry safer rather than weaker, and should not be considered punitive. Their goal is to re-direct the financial sector so that it avoids embarking on unsustainable patterns. These actions are aimed at commercial banks as well as at non-traditional financial players to make sure that excessive risk-taking is not taking place outside the auspices of regulators. Ensuring that the financial sector is large enough to strengthen the economy while not being too large is a task that we take very seriously. There is a clear trade-off between economic growth and financial stability, and it is a difficult but critical task to strike a good balance, ensuring that we end up neither with too little growth nor with too little stability.

Fluctuation of Gold Price

read and give rewards to me ABSTRACT Gold is a brilliant yellow precious metal that is resistant to air and corrosion. Gold comes second after bank deposits when it comes to the preference for investment in India and considered a savings and investment vehicle. India is the world’s largest consumer of gold in jewelry as an investment.Gold is traded in the form of securities on stock exchange Even when the gold prices are high there is steel boom in the commodities market of gold hence the main purpose and the need of the study are to know the investment pattern in gold and to hedge the risk The data which is used in the study is secondary data. The analysis has been done by using the technical tools Relative Strength Index (RSI), MACD. From the analysis it can be concluded that gold as an investment avenue has increased. There wider market for gold and a person with small amount can trade in gold.RSI can be considered as the best tool to evaluate the price movement of gold. Th e investors have to keep a keen watch on the price of gold and since there is an upward momentum in the price of gold it is time for the investor to sell CONTENT | | | | |CHAPTER |PARTICULAR |PAGE NO | |NO. | | | |1. INTRODUCTION | | | |NEED FOR THE STUDY | | | |OBJECTIVE OF THE STUDY | | | |SCOPE OF THE STUDY | | | |RESEARCH METHODOLOGY | | |LIMITATIONS | | | | | | |2. REVIEW OF LITERATURE | | | |TABLES AND GRAPH | | | | | | |3. COMPANY PROFILE | | | | | | |4. |DATA ANALYSIS & INTERPRETAIONS | | | | | | |5. FINDING | | | |CONCLUSION | | | |RECOMMENDATIONS | | | | | | |6. BIBLIOGRAPHY | | CHAPTER NO — 1 INTRODUCTION INTRODUCTION ABOUT INDIAN COMMODITY MARKET Commodity future trading is an old concept and flourished in the late nineteenth century. There were several such exchanges that traded in specific commodities in certain geographies. In the 1960s the futures market ran into trouble as high inflation resulted from a series of wars and droughts in the countr y which lead to considerable speculation and hoarding of agricultural commodities.Ever since the down of civilization commodity trading has become an integral part in the life of mankind. The very reason for this lies in the fact that commodities represent the fundamental utility of human being. Commodity markets are market where raw or primary products are exchange. These raw commodities are traded regulated commodity exchange they are bought and sold in standardize contract that may any movable property other them actionable claims, money and securities. This commodity market is becoming day by day the best for the increasing economy.Gold is valued in India as saving and investment vehicle and is the second preferred investment after bank deposit. India is world’s largest consumer of gold jeweler and in investment. Gold is traded in the form of securities on stock exchange. In the cities gold is facing competition from the stock market and a wide range of consumer goods. Do mestic consumption is dictated by monsoon, harvest and marriage season. Indian jewellery off take is sensitive to price increases and even more so to the volatility.For years, portfolio managers have recommended a minimum of 10% to 20% of one’s total net worth in gold as a hedge against inflation or as a safety net in the event that our paper money system collapses. Hence the study is about the commodities market in gold. Every commodity has its own price, and varies across markets even at the point of first sale, i. e. the wholesale market. There is of course another very active financial market, which has a price that is widely traded, i. e. the stock market. Here shares of companies are traded by investors at prices which are determined by multitude of perceptions. NEED FOR THE STUDY:- ? Since there is a cut throat competition in the present world market There is a need to study about factors affecting gold prices ? Even when the gold prices are high there is still boom in the commodities market of gold hence the main purpose and the need of the study are to know the investment patterns in gold and to hedge the risk OBJECTIVE OF THE STUDY:- 1. To know how gold is traded 2. To know the fluctuation of gold prices 3. To know the factors affecting gold prices 4. To evaluate the trend analysis of gold . To study the impact of gold on investors METHODOLOGY: – The data which is used secondary in a nature. SECONDARY DATA:- ? From various test books, journals, magazines, news papers and booklets from company. ? Information collected from different websites likes Gold World, MCX etc. SCOPE OF THE STUDY:- ? The scope of the study is about the day to day changes in the price of gold and the reasons behind the change. ? It focuses more on the fluctuations and the interest of investors to invest in gold even though the price is getting higher. The study also focuses more on the fluctuation in the gold and its relation to oil markets oil and gold are the two main items in the economy now that tends to increase day by day. LIMITATIONS:- ? Difficulty in getting the lives prices of gold in absence of online research software. ? Use of limited technical tools. ? Commodity trading is limited to gold only. ? There may be factor other than those studied in this research which may impact on gold prices. ? The study is limited only for a certain period of time i. e. April to June 2012 CHAPTER-2 REVIEW OF LITERATURE TRADING OF GOLD IN COMMODITY MARKETS COMMODITY MARKETCommodity markets are markets where raw or primary product these raw commodities are traded on regulated commodities Exchange in which they are brought and sold in standardized contract it cover physical product markets but not ways that services including those of government, nor investment debt, can be seen as a commodity A commodity trading is sophisticated form of investing it is similar to stock trading but instead of buying and selling shares of companies, an investor buys an d sells commodities likes stocks, commodities are traded on exchange where buyers and sellers can work together to either get product they need or to make a profit from the fluctuation prices. There are few ways to trade commodities. Futures are contracting to buy or sell commodities at specific date. An option is the right to buy or sell a commodity at a specific price and date. COMMODITY TRADING: Trading futures is the purest way to invest in commodities. To trade commodities, an individual trading account can be opened either directly with a futures commission merchant or indirectly through as introducing broker.Another way to trade commodities is through a managed account, where you give someone written power of attorney to make and execute decisions about what and when to trade. He or she will have discretionary authority to buy or sell for your account or will contract you for approval to make trades, or you can hire a commodity trading advisor for a fee. And lastly, ever incr easingly popular methods of diversified investing in commodities include commodity pools (limited partnerships) or commodity related mutual funds. In all futures markets, trading decision are made in two ways – Fundamental or Technical, although many traders use a combination of both.Fundamental analysis includes all factors that influence supply and demand. For the physical commodities markets, fundamental factors include weather and geopolitical events in producing countries – outside forces that influence price action. For the financial futures markets, factors such as Federal Reserve actions and economic reports are among fundamental forces affecting prices. Technical analysis is based strictly on inside market forces. It involves tracking various price patterns that occurred in the markets in the past. Analysts focus on a variety of time frames, and trading decisions are based on past tendencies with the idea these price patterns tends to repeat themselves.Technic al analysis involves a wide range of techniques, and a variety of market indicators are studied including volume, open interest, and momentum. Each individual analyst has his favorite approach – technical analysis is just as much art as it is science. REGULATOR OF COMMODITY MARKET THE DIFFERENT PRODUCT IN COMMODITY MARKET ARE USE 1. Precious metal 6. Plantations 2. Base metal 7. Spice 3. Pulses 8. Sugar 4. Cereals 9. potato 5. Energies Introduction Gold Gold is a unique asset based on few basic characteristics. First, it is primarily a monetary asset, and partly a commodity.As much as two thirds of gold’s total accumulated holdings relate to â€Å"store of value† considerations. Holdings in this category include the central bank reserves, private investments, and high-cartage jewelry bought primarily in developing countries as a vehicle for savings. Thus, gold is primarily a monetary asset. Less than one third of gold’s total accumulated holdings can be c onsidered a commodity, the jewelry bought in Western markets for adornment, and gold used in industry. The distinction between gold and commodities is important. Gold has maintained its value in after-inflation terms over the long run, while commodities have declined. Some analysts like to think of gold as a â€Å"currency without a country’.It is an internationally recognized asset that is not dependent upon any government’s promise to pay. This is an important feature when comparing gold to conventional diversifiers like T-bills or bonds, which unlike gold, do have counter-party risk History of gold in India Prior to 1962, India was the world’s largest gold market and the main trading center was Bombay. In 1962, the government enacted the Gold Contract Act, which prohibited the citizens of India from holding pure gold bars and coins due to loss of reserves during the indo-china war. It was declared that the old holdings in pure gold bars to be compulsorily co nverted into jewelry. Pure gold bars and coins were to be dealt only by licensed dealers.A large unofficial market sprung up which dealt in cash only as a consequence of this legislation that adversely affected the official gold market. This also made way for smuggling and black marketing, which comprised of many jewelers and bullion traders. In 1990, India was on a verge of default of external liabilities as it had a major foreign exchange problem. It had to give up the concept of controlling and licensing as it led to nothing more than corruption and shortages. As a result, the India government pledged 40 tones from their gold reserves with the bank of England. India had to adopt the concept of liberalization. The government abolished the 1962 Gold control Act in 1992 and liberalized the import of gold in India for a duty payment of Rs. 250per 10 grams.The government made up for the foreign exchange problem by allowing free imports and earning the taxes. This step expanded the gol d market and it also waved off the unofficial trade i. e. smuggling and black marketing. This makes India the most price-sensitive market for gold in the world. Gold in Indian present scenario Gold is valued in India as a savings and investment vehicle and is the second preferred investment behind bank deposits. India is the world’s largest consumer of gold in jewelry (much of which is purchased as investment). The hoarding tendency is well ingrained in Indian society, not least because inheritance laws in the middle of the twentieth century lent a great desirability to anonymity.Indian people are renowned for saving for the future and the financial savings ratio is strong, with a ratio of financial assets-to-GDP of 93%. Gold’s circulates within the system and roughly 30% of gold jewelry fabrication is from recycled pieces. India is typically also the largest purchaser of coins and bars for investment (>80tpa), although last year it had to concede first place to Japan in the wake of the heavy buying in the first quarter due to fears for the stability of the Japanese banking system. In 1998-2001 inclusive, annual Indian demand for gold in jewelry exceeded 600 tons; in 2002, however, due to rising and volatile prices and a poor monsoon season, this dropped back to 490 tons, and coin and bar demand dropped to 67 tons.Indian jewelry off take is sensitive to price increases and even more so to volatility, although this decline in tonnage since 1998 is also due in part to increasing competition from white and brown Goods and alternative investment vehicles, but is also a reflection of the increase in price. The Indian bride’s â€Å"Streedhan†, the Wealth she takes with her when she marries and which remains hers, is still gold, however (thus giving gold an important role in the â€Å"empowerment† of women in India). The distinction between gold and commodities is important. Gold has maintained its value in after-inflation terms ove r the long run, while commodities have declined. Some analysts like to think of gold as a â€Å"currency without a country’.It is an internationally recognized asset that is not dependent upon any government’s promise to pay. This is an important feature when comparing gold to conventional diversifiers like T-bills or bonds, which unlike gold, do have counter-party risk. SIGNIFICANCE OF GOLD IN INDIAN CULTURE Gold is a precious metal with which man kind has had a long and very intimate relation. Gold is considered as a symbol of purity and good fortune. Most of the gold that the entire world holds lies in India. The main reasons why Indians consider gold as an investment are. ? Gold is considered as equivalent to liquid cash: gold is considered as a security or assets which can be converted in to cash when ever required. Gold is very good investment :due to consistently increasing value, gold is considered as safe and secure investment ? Gold is a goof gift item: it i s precious and worthy it is again as gift during wedding birthdays or any other special occasions. It is symbol of prestige and is considered auspicious ? Gold considered as status symbol: Gold is symbolizes wealth. in Indian the weddings, the bride wears jewellary as a symbol of the family status. ? Gold has religious significance : Gold is a symbol of Hindu goddess lakshmi. Gold is bought or gifted on occasions of festivals like Dhanteras Dussera and diwali . ? Gold has great ornamental value: women and gold jewellery are inseparable from each other.Gold ornaments area always in fashion and will never become out of fashion . even the wedding rings are made of gold to mark a long lasting relationship ? Gold : Ancentral property: Gold is passed down from generation to generation as an ancestral property. .Gold producing countries †¢ South Africa †¢ United states †¢ Australia †¢ China †¢ Canada †¢ Russia †¢ Indonesia †¢ Peru †¢ Uzbekistan †¢ Papua new guinea †¢ Ghana †¢ Brazil †¢ Chile †¢ Philippines †¢ Mali †¢ Mexico †¢ Argentina †¢ Kyrgyz tan †¢ Zimbabwe †¢ Colombia The largest producer of Gold is South Africa. It accounts for an estimated 16. 5 million ounces of Gold annually in the next 3 year: and produces almost 20 percent of the world’s bullion.Hopping to control its declining production trend due to the extended weakness in the price of Gold in recent years. The South African Gold industry is working in the direction to lower its production costs and boost productivity. The second largest producer of gold is united states. It accounts for an estimated 10. 4 million ounces of Gold annually by 2001 and produces about 12. 5% of the world’ Gold supply Due to the expansion US Mining operations. And because of the reduced profitability due to the low price of Gold. Reduction in mine production is expected by 9% by the US during the next 3 years th e third largest producer of gold is Australia with an estimated 9. 6 million ounces annual production by 2001.Nearly 45% of the world gold supply was produced by the top 3 producing nations Latin America (Mexico, Peru, Chile and Brazil) and the Far East producer are accepted to increases production in the next three years. Though these countries add up to a very a small shares in the world’s totally supply there production increase will counter act some of the production cuts made up by the top 3 big producers Current Scenario in Indian Commodity Market Need of commodity derivatives for India India is among top 5 producers of most of the commodities, in addition to being a major consumer of bullion and energy products. Agriculture contributes about 22% GDP of Indian economy. It employees around 57% of the labor force on total of 163 million hectors of land Agriculture sector is an important factor in achieving a GDP growth of 8-10%. All this indicates hat Indian can be promot ed as a major centre for trading of commodity derivatives. INDIAN COMMODITY MARKET TRADING AND EXHANGES ? MCX: MULTI COMMODITY EXHANGE ? NCDEX: NATIONAL COMMODITY AND DERIVATIES EXHANGE ? NSEL: NATIONAL SPOT EXHANGE LTD ? NMCE: NATIONAL METAL AND COMMISSION EXHANGE MULTI COMMODITY EXCHANGE – MCX Multi commodity exchange is a commodity exchange based in Mumbai, the financial capital of India. The MCX is a demutualized electronic multi commodity futures exchange, and enables future trading of various agricultural and non agricultural commodities such as Metals, Pulses, Oils, Fiber, Energy, Petrochemicals, Plantations, Cereals, Bullion and Spices etc.As on 31st of December 2007, the exchange was offering futures trading in 55 different commodities. Established in November 2003 by Financial Technologies, the MCX hold a permanent recognition issued by government of India. Pattern on multi commodity exchange (MCX) MCX is currently largest commodity exchange in the country in terms of trade volumes, further it has even become the third largest in bullion and second largest in silver future trading in the world. Coming to trade pattern, though there are about 100 commodities trade on MCX, only 3 or 4 commodities contribute for more than 80 percent of total trade volume. As per recent data the largely trade commodities are Gold, Silver, Energy and base Metals.Incidentally the futures trends of these commodities are mainly driven by international futures prices rather than the changes in domestic demand-supply and hence, the price signals largely reflect international scenario. Among agriculture commodities major volume contributors include Gur, Urad, Mentha oil etc. whose market sizes are considerably small making then vulnerable to manipulations. NATIONAL COMMODITY AND DERIVATIVES EXCHANGE LTD – NCDEX The second largest commodity exchange in the country after MCX. However the major volume contributors on NCDEX are agricultural commodity but most of them have common inherent problem of small market size, which is making them vulnerable to market manipulations and over speculation.About 60% trade on NCDEX comes from guar seed, chana and urad (narrow commodities as specified by FMC). National Commodity and Derivatives Exchange Ltd (NCDEX) is a technology driven commodity exchange. It is a public limited company registered under the Companies Act, 1956 with the Register of companies, Maharashtra in Mumbai on April 23, 2003. it has an independent Board of Directors and professionals not having any vested in commodity market. It has been launched to provide a world-class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency.In December 2003, the National Commodity and Derivatives Exchange Ltd (NCDEX) launched futures trading in nine major commodities. To begin with contracts in Gold, Silver, Cotton, Soya bean, Soya oil, Ra pe/ Mustard seed, Rapeseed oil, Crude palm, and RBD palmolein are being offered. National Multi Commodity Exchange (NMCE) NMCE is third national level futures exchange that has been largely trading in agricultural commodities. Trade on NMCE had considerable proportion of commodities with big market size as jute rubber etc. But, in subsequent period, the pattern has changed and slowly moved towards commodities with small market size or narrow commodities.Analysis of volume contributions on three major national commodity exchanges reveled the following pattern, major volume contributors. Majority of trade has been concentrated in few commodities that are ? Non Agricultural Commodities ( bullion, metals and energy) ? Agricultural commodities with small market size ( or narrow commodities) like guar, urad, menthe etc The commodity markets are being classified as following types of commodities. 1. Agricultural products. 2. Precious metals. 3. Other metals. 4. Energy. GENERAL CHARACTERIST ICS OF GOLD: ? Gold is primarily a monetary asset and partly a commodity. ? More than two-thirds of gold’s total accumulated holdings relate to â€Å"value for investment† with central bank reserves, private players and high-carat jewellery. Less than one-third of gold’s total accumulated holdings is a â€Å"commodity† for jewellery in western markets and usage in industry. CHARACTERISTICS OF GOLD MARKET: ? Gold market is highly liquid and gold held by central banks and other major institutions and retail jewellery keep coming back to the market. ? Due to large stocks of gold as against its demand, it is argued that the core driver of the real price of gold is stock equilibrium rather than flow equilibrium. ? Effective Portfolio Diversifier: this phrase summarizes the usefulness of gold in terms of â€Å"Modern Portfolio Theory†, a strategy which is utilized by many investment managers today. Using this approach, gold can be used as portfolio diver sifier to improve investment performance. Effective Diversification During â€Å"Stress† Periods: Traditional methods of portfolio diversification often fail when they are most needed-that is, during periods of financial â€Å"stress†(instability). On these occasions, the correlations and volatilities of return for most asset classes(including traditional diversifiers such as bonds and alternative assets)increase, thus reducing the intended â€Å"cushioning† effect of diversified portfolio. INDIAN GOLD MARKET: ? Gold is valued in India as savings and investment vehicle and is the second preferred investment after bank deposits. ? India is the world’s largest consumer of gold in jewellery and in investment. In July 1997 the RBI authorized the commercial banks to import gold for sale or loan to jewellers and exporters. ? The gold hoarding tendency is well ingrained in Indian society. ? Domestic consumption is dictated by monsoon, harvest and marriage season . Indian jewellery off take is sensitive to price increases and even more so to the volatility. ? In the cities gold is facing competition from the stock market and a wide range of consumer goods. ? Facilities for refining, assaying, making them into standard bars in India, as compared to the rest of the world, are insignificant, both qualitatively and quantitatively. GOLD MARKET MOVING FACTORS: ? Above ground supply from sales by central banks, reclaimed scrape and official gold loans. Producer/miner hedging interest. ? World macro economic factors-US Dollar, interest rate. ? Comparative returns on stock markets. ? Domestic demand based on monsoon and agricultural output. IMPORTANT WORLD GOLD MARKETS: ? London is the biggest as well as the oldest gold market in the world. ? Mumbai under India’s liberalized gold regime. ? New York as the home of futures trading. ? Zurich as a physical turntable. ? Istanbul, Dubai, Singapore and Hong Kong as doorways to important consuming reg ions. ? Tokyo was TOCOM sets the mood of Japan. Headquartered in Mumbai, Multi Commodity Exchange of India Ltd (MCX) is a state-of-the-art electronic commodity futures exchange.The demutualised Exchange set up by Financial Technologies (India) Ltd (FTIL) has permanent recognition from the Government of India to facilitate online trading, and clearing and settlement operations for commodity futures across the country. Having started operations in November 2003, today, MCX holds a market share of over 80% of the Indian commodity futures market, and has more than 2000 registered members operating through over 100,000 trader work stations, across India. The Exchange has also emerged as the sixth largest and amongst the fastest growing commodity futures exchange in the world, in terms of the number of contracts traded in of the number of contracts traded in 2009. MCX offers more than 40 commodities across various segments such as bullion, ferrous and non-ferrous metals, and a number of a gric-commodities on its platform.The Exchange is the world's largest exchange in Silver, the second largest in Gold, Copper and Natural Gas and the third largest in Crude Oil futures, with respect to the number of futures contracts traded. The Exchange strives to be at the forefront of developments in the commodities futures industry and has forged strategic alliances with various leading International Exchanges, including Euro next-LIFFE, London Metal Exchange (LME), New York Mercantile Exchange, Shanghai Futures Exchange (SHFE), Sydney Futures Exchange, The Agricultural Futures Exchange of Thailand (AFET), among others. For MCX, staying connected to the grassroots is imperative.Its domestic alliances aid in improving ethical standards and providing services and facilities for overall improvement of the commodity futures market. EXCHANGE-TRADED GOLD: GOLD-BACKED SECURITIES Gold is traded in the form of securities on stock exchange in Australia. France, Hong Kong, Japan, Mexico, Sin gapore, South Africa, Switzerland, Turkey, the United Kingdom and the United States. By design, these forms of securitized gold investment, all regulated financial products, are generally referred to as Exchange Traded Commodities or Exchange Traded Funds (ETFs), and are expected to track the gold price almost perfectly. Unlike derivative products, the securities are 100% backed by physical gold held mainly in allocation form.These securities have had a major impact on the gold market, representing an annual average of 32% of identifiable investment and 6. 5% of total physical demand over the 5 years to 2008. Financial advisors and other investment professionals can provide further details about these products. FUTURES AND OPTIONS GOLD FUTURES Gold futures contracts are firm commitments to make or take delivery of a specified quantity and purity of gold on a prescribed date at an agreed price. The initial margin – or cash deposit paid to the broker – is only a fraction of the price of the gold underlying the contract. That means investors can achieve notional ownership of a value of gold considerably greater than their initial cash outlay.While this leverage can be the key to significant trading profits, it can also give rise to equally significant losses in the event of an adverse movement in the gold price. Futures prices are determined by the market’s perception of what the carrying costs – including the interest cost of borrowing gold plus insurance and storage charges -ought to be at any one time. The futures price is usually higher than the spot price for gold. Futures contracts are traded on regulated commodity exchanges. The largest are the New York Mercantile Exchange Comex Division (recently rebranded CME Globex, after a merger between Chicago Mercantile Exchange and NYMEX), the Chicago Board of Trade (part of CME) and the Tokyo Commodity Exchange. Gold futures are also traded in India a Dubai.The Commodity Futures Trading commission provides extensive reports on derivatives trading in the United States. Tradable commodity indices are based on fully collateralized baskets of long-only commodity futures, all of which include a small allocation to gold. GOLD OPTIONS These give the holder the right, but not the obligation, to buy (‘call' option) or sell (‘put' option) a specified quantity of gold at a predetermined price by an agreed date. The cost of such an option depends on the current spot price of gold, the level of the pre-agreed price (the ‘strike price'), interest rates, the anticipated volatility of the gold price and the period remaining until the agreed date.The higher the strike price, the less expensive a call option and the more expensive a put option. Like futures contracts, buying gold options can give the holder substantial leverage. Where the strike price is not achieved, there is no point in exercising the option and the holder's loss is limited to the premium initia lly paid for the option. Like shares, both futures and options can be traded through brokers. Gold price Fluctuation: Responsible factors Gold has widely used throughout the world as a vehicle of monetary exchange, as an investment, use in jewelry, medicine, the food and drink also. Gold provided the independent of states, currencies, productivity and credit worthiness.Many experts advice to the private investors that they do 5 to 10 % their investment in the gold because regular purchase of gold and silver coins helps to protect the smaller investor against price and currency fluctuation. Gold has always been prized as precious and valuable. It does not deteriorate. Gold is also maintained the liquidity in our portfolio because gold is traded around the world. With gold we can possess the international currency which we can sold around the world at any time. This table shows the gold price fluctuation. [pic] Table shows the gold price fluctuation In the recent scenario there are va rious issues and factor responsible for the gold price fluctuation. Increasing deficit in the balance of trade in the united states. ? The declining production of some gold producing countries the major gold producing company Africa, Canada, Australia, china, Philippines. ? Central bank and international monetary fund also play the major role in gold fluctuation. It is generally accepted that interest are closely related to the gold price. As the interest rate rise the general tendency is for the gold price, which earn no interest to fall and rates dip for gold price to rise. ? At the end of 2008 financial crisis captured all the global market, a trend start to develop of regular investor allocating a certain amount of their portfolio into gold.The most popular reason to own gold is as hedge against the inflation. ? From late 2009 Fears of Sovereign debt crises developed among the investors as a result rising the private and government debt levels around the world together with the wave of downgrading of government debt in some European states. The crises have major impact on several European countries, most notably on Greece, Ireland, Italy, Portugal and Spain. Several other factors which are responsible to pushes the gold prices upward political unrest and war monetary expansion, economic misbalance because of these reasons people lose their faith in the value of their currency and they invest into the gold as permanent or a fixed assets. [pic]

Analysis Of The Lord Of The Flies - 889 Words

Randall English-4 15 April 2016 LOTF Literary Analysis Stranded on an island, a group of boys have the choice to be civil or savage. In Lord of the Flies, by William Golding, British schoolboys are marooned on an island. They voted Ralph to be the leader in an effort to remake the culture that they had left behind, accompanied by the intelligent Piggy as counselor. But Jack wants to be the leader too, and he individually lures all of the boys away from civility to the brutal survivalism of hunters. The conch symbolizes power, respect, and social order. Within the Lord of the Flies, Golding provides a brief look at the savagery that controls even the most civilized human beings. William Golding mirrors our modern day society by†¦show more content†¦All this I meant to say. Now I ve said it. You voted me for chief. Now you do what I say. They quieted, slowly, and at last were seated again. Ralph dropped down and spoke in his ordinary voice (Golding 81). All that Ralph needs to do is point that all of the bo ys chose to follow a specific set of rules. When a country is struggling, people look toward leaders that symbolizes something good, just as the just as Ralph was chosen to be Chief because of his symbolic power. â€Å"Ralph was vexed to find how little he thought like a grownup and sighed again. The island was getting worse and worse† (Golding 139). When Ralph observes that order is falling apart, he says the island is becoming worse and worse, rather than the boys. The simple fact that Ralph blames the island instead of the boys proves he is a good leader, and a good leader is civil. The conch symbolizes power, respect, and social order, just like Ralph. But there was a stillness about Ralph as he sat that marked him out: there was his size, and attractive appearance; and most obscurely, yet most powerfully, there was the conch. The being that had blown that, had sat waiting for them on the platform with the delicate thing balanced on his knees, was set apart (Golding 22). This quote shows how the conch and Ralph are connected in the boy’s heads, Ralph has the conch and he has authority so that sets him apart. This is the reason the boys voted for Ralph instead ofShow MoreRelatedAnalysis Of The Lord Of The Flies 1004 Words   |  5 PagesBrandon Lawrence Mrs.Brown English 3 October 2017 Character Analysis Hidden meaning can be found in many different places. They can be in poems, novels, murals, paintings, and even in everyday life. Hidden meanings are there to challenge the reader, to make them think and really analyze the work. In the case of the novel â€Å"The Lord of The Flies,† by William Golding, the hidden meaning comes to us in the form many of his characters. One of them is Jack. Jack started off like everyone else equalRead MoreAnalysis Of The Lord Of The Flies 1533 Words   |  7 Pagesmockery by saying, â€Å"You come to me equipped with a sword, spear, and javelin, but I come to you in the name of the Lord, the same Lord that you have been ridiculing. David then withdrew a stone and slings it towards Goliath, striking him in the forehead and brings the giant to his death. David proves that regardless to whatever challenges one faces, as long as you have faith in the Lord and approach each in Jesus name, He will fight your battle and give you the victory. David was a small boy facingRead MoreAnalysis Of Lord Of The Flies 1482 Words   |  6 Pagespersonal experiences by being confronted with other people’s personal experiences. Tolerance enables us to accept others rather than isolate them which is evident in the novel â€Å"Lord of the flies†. Tolerance allows us to understand other perspectives and empathise with others around us. This is shown in the book Lord of the Flies where Ralph helps Piggy build up his confidence. Ralph empathises with Piggy and works with him to strengthen his lack of inclusion and self esteem. He does this so that oneRead MoreAnalysis Of Lord Of The Flies 1581 Words   |  7 PagesAlbert Einstein once said, â€Å"The world will not be destroyed by those who do evil, but by those who watch them without doing anything.† In Lord of the Flies there are many types of people, the evil, the in between, and the good. Known by Sigmund Freud as the Id, the Ego, and the Superego. The Id is the more dominate character, they want what they want and do not care about reality or societal norms. The Ego is the balance of the desires of the Ids, and the realities of the Superegos. Lastly the SuperegoRead MoreLord of the Flies Comparative Analysis949 Words   |  4 Pagesï » ¿Lord of the Flies Comparat ive Analysis Angela Boui Throughout the book â€Å"Lord of the Flies† several different universal themes occurred. Not just in this book but in movies and TV shows as well. The different themes all show morals surrounding situations both good and bad. One main theme that is present is how people abuse power when it is not earned. This happens because people crave power and they want to be in control. In the following paragraphs, different themes will be linked with theRead MoreAnalysis Of Lord Of The Flies 1058 Words   |  5 PagesIn the popular novel, Lord of the Flies, there are many elements to the story that are not seen when just viewed from the surface. In order to understand these ideas, we have to dive deeper and really analyze the characters in the story. When you do this, a very important theme will arise and that is the very different personality types of the boys on the island. These personality types can be explained using Freud’s psychoanalytic theory of personality. His th eory explains that there are threeRead MoreAnalysis Of Lord Of The Flies 1605 Words   |  7 PagesIntro: Give title and author. Background. In Lord of the Flies by John Steinback a group of young boys are stranded on an island. To survive the boys decided to vote who should be their leader, Ralph or Jack. Piggy is a smart, fat boy who is not respected by the boys. Ralph is the face of leadership but not the best for the job compared to Piggy. Piggy is the brains behind Ralph who gives the essential idea to further progress the island. Ralph is the face of leadership and according to everyoneRead MoreAnalysis Of Lord Of The Flies 1610 Words   |  7 PagesSathyapriya Saravanan Wilkinson English 10 Honors; Period 1 4 November 2016 Everyone Wears One: Masks in Lord of the Flies â€Å"We all have a social mask, right? We put it on, we go out, put our best foot forward, our best image. But behind that social mask is a personal truth, what we really, really believe about who we are and what we re capable of† (Phil McGraw) one once said. In Lord of the Flies the characters wear a social mask that opposes their true feelings. Written by William Golding, the storyRead MoreAnalysis Of Lord Of The Flies 912 Words   |  4 Pagesexpression†, according to bullyingstatistics.org. It has also been shown that those who are bullied themselves often go on to bully others because it is all they know, or that bullying covers up their own shames. The character Jack Merridew in Lord of the Flies is not evil like many would argue, but rather is ashamed of the fact that he is gay and closeted. This is supported by the hunter’s casting off of religion and government, Jack’s inability to hunt unless in front of other boys, and the beastRead MoreAnalys is Of Lord Of The Flies 988 Words   |  4 Pagesone was to miss one day of rehearsal there would be a hole and another individual would miss their dots because they had no one to guide off of. Golding believed that â€Å"everybody all of the time† was true in the sense of society. In his novel Lord Of The Flies Piggy, Ralph, and Jack have failures during the novel that cause other mistakes to be more significant. Proving that society fails due to the failure of the individual. Piggy fails three major times in the novel one causing his death and the

Toni Morrison s Beloved Moral Ambiguity - 1108 Words

Moral Ambiguity in Beloved Toni Morrison’s classic novel, Beloved, can be briefly summarized as a story with woman who is living in both the horrible aftermath of slavery, as well as her action of murdering her baby child in an attempt to save her from slavery. This story is based on the true story of Margaret Garner, who killed her own child and attempted to kill her other children instead of willfully letting them all return to lives of slavery. While slavery is today clearly classified as wrong by the vast majority of civilized society, as is infanticide, the event that takes place in this book is not as black and white. These instances of a grayer side of morality represent a sort of moral ambiguity that runs rampant throughout the entire novel. The example that is of paramount importance is when Sethe, the protagonist of the story, murders her child in order to save the child from a life of slavery. While at first glance, this act may seem wrong to modern readers, there is actually some evidence th at, when thought about, justifies Sethe’s actions. Sethe lives in the shadow of her act of infanticide throughout the entire length of the book. This is because its legacy pervades itself throughout the entire novel, showing events leading up, and ways the future has been affected. The novel begins as such: â€Å"124 was spiteful. Full of a baby’s venom. (Page 1)† This baby refers to Beloved, who became a ghostly presence in Sethe’s house and continuously terrorizes the houseShow MoreRelatedTwo Contrasting Views of Slavery in Literature: Beloved and American Negro Slavery2068 Words   |  9 PagesIn this essay, I will be examining the works of two authors on the topic of slavery in America: Ulrich B. Phillips American Negro Slavery (1918) and Toni Morrison Beloved (1987). One writes as a Southerner and a historian who is defending southern slaveholders and draws upon contemporary racial theory to justify the system as beneficial to African Americans. The other writes as an African-American woman who is looking to write women into history and in doing so, add a female voice to the pastRead MoreAnalysis Of `` Beloved `` By Toni Morrison2353 Words   |  10 PagesAs a contemporary novel, Beloved also resembles the work of historical fiction. Morrison s work accentuates popular black culture, as well as art, music and literature. In addition, Morrison is known for the juxtaposition of her novels and combination of bliss and agony as well as amusement and tears. These combinations can be compared with those of the blues and jazz music. In addition to this sense of culture that Morrison adds to her works, the legacy of black female writers play a key role inRead MoreBrief Survey of American Literature3339 Words   |  14 PagesTranscendentalism As the leader of this movement, Ralph Waldo Emerson interpreted transcendentalism as â€Å"whatever belongs to the class of intuitive thought,† and as â€Å"idealism as it appears in 1842.† He believed that the transcendental law was the â€Å"moral law† through which man discovered the nature of God as a living spirit. Three Sources It was a system of thought that originated from three sources. First, American Unitarianism. It represented a thoughtful revolt against orthodox Puritanism. Unitarianism