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that the three main categories composing Gold global demand have different features and behaviors during business cycles.

As it has already been explained within this dissertation, Gold demand from investors is basically countercyclical. For this reason, from 2006 until 2009, Gold investment demand is strongly increased. Net Investments in Gold soared by more than 70% in 2008 and they later stabilized during 2009.

Great part of this increment is attributable to Gold ETFs (Exchange Traded Funds), investment funds traded on stock exchanges, that track the performance of Gold. Basically we can affirm that Gold ETFs have been created in order to reduce the carrying cost of Gold for investors [23] , consolidating Gold appeal for different investors’ classes.

In 2009, Gold demand from ETFs and similar funds reached 595 tons, becoming the single largest category for Gold demand. 2009 investments inflows in Gold ETFs lead to a total estimable amount of 1.762 tons of Gold [24] held by these kind of funds.

This huge quantity is still more impressive if we think that it corresponds to almost 70 billion of US dollars [25] .

In great contrast with Gold demand from investments, Jewelry demand is strongly correlated to business cycles. The main reason of this correlation is certainly that Jewelry demand is strictly determined by consumer purchasing power. The more Gold price will increase, the more consumers would not be able to purchase the same amount of Gold or Jewels, with a determined purchasing power.

During the past year, Gold price surged by more than 25%, negatively affecting Jewelry industry margins and sales. Furthermore, 2009 have seen a strong decrease in consumer purchasing power for the great majority of the population, still damaging demand for Jewels. As a result, Jewelry demand for Gold decreased by 20%, in volume terms, during 2009. Anyway, this dramatic percentage reduction did not affect Jewelry role as the main source of Gold demand. Even in 2009, Jewelry accounted for more than 50% of Gold yearly total demand, for an estimate quantity of 1.747 tons [26] .

Another interesting feature characterizing Jewelry demand is its seasonality; in fact, Gold jewelry quarterly demand break down shows that global demand for jewels is greatly higher during the fourth quarter of the year. The main reason explaining this phenomenon is the large number of religious or end-of-year festivals occurring in this period. In fact, Hinduism festival of light, ‘Diwali’, western world celebrations of Christmas and Islamic ‘Eid Al Fitr’ feast of sacrifice at the end of Ramadan are the major occasion associated with Gold Jewelry purchase and all of them take place between October and December.

Moreover, due to the fact that Jewelry Gold demand strongly derives from income levels, the strong economic growth that is taking place in China, India and other Asian countries as Indonesia and Vietnam is giving more and more relevance to these countries as major Jewelry markets in volume terms. As a matter of fact, India and China are identifiable as the major end-user countries in the world Jewelry market.

The third component of Gold demand derives from the Industrial sector. This kind of demand is quite inelastic as we can observe a 20% decrease in volume terms from 2007 to 2009, in contrast to an increase in Gold price by more than 70% [