This paper empirically examines a subsection of the gold market that has evolved within the last 20 years. To date, academic literature has primarily focused on analytical and empirical analyses of the physical gold market and the gold price. This study will contribute to the existing gold market literature from a different perspective: the lending market.
Therefore this thesis will initially investigate how the gold lending market functions in general. This will include an analytical overview of the main transaction types, the market participants and their intentions, the gold lease rate, and the impact of central bank lending policy. Secondly, it is unclear as to what the determinants of demand and supply are for the leasing market. Linking theoretical and empirical findings from the gold market and the gold price, this thesis seeks to set up a gold lending market equilibrium. With that, the gold lease rate is derived and empirically tested. The resulting determinants of the gold lease rate are developed with quarterly time-series data from 1990 to 2009.
Table of Contents
- Introduction
- The Gold Lending Market
- The bullion market
- The main transactions types on the lending market
- Central banks and the gold lending policy
- The development of the gold leasing rates
- Literature Review
- Gold and the gold price
- Central banks and the gold market
- The gold price
- Hedging
- Inflation
- Shocks and safe investment
- The gold lending market and the lease rate
- The commodity lease rate
- Convenience yield and the gold lease rate
- Gold and the gold price
- The Gold Lease Rate Model
- Central bank supply
- Gold producer demand
- Bullion bank demand
- Derivation of the model
- Data
- Model Analysis and Results
- The gold leasing rate
- Leasing rates before 2000
- Expected inflation and economic shocks
- Counterparty and investor influence
- Gold and the gold leasing rate
- Speculative influence
- The silver leasing rate
- The gold leasing rate
Objectives and Key Themes
This thesis aims to analyze the gold lending market and develop a model to explain the gold lease rate. The study investigates the factors influencing this rate and explores their interrelationships. * Analysis of the gold lending market mechanics. * Development and testing of a model for the gold lease rate. * Examination of the influence of central banks on gold lending. * Investigation of the role of speculation and economic shocks. * Comparison of gold and silver lease rates.Chapter Summaries
Introduction: This chapter introduces the topic of the gold lending market and outlines the scope and objectives of the thesis. It highlights the importance of understanding the dynamics of this market and its relevance to broader financial markets. The introduction sets the stage for the subsequent chapters, which delve into the specifics of gold lending, literature review, model development, data analysis, and results. The Gold Lending Market: This chapter provides a detailed overview of the gold lending market, covering various aspects such as the bullion market, different transaction types (including loans and swaps), and the role of central banks in shaping gold lending policies. It explores the evolution of gold leasing rates and their significance in the overall market dynamics. The chapter lays the groundwork for a deeper understanding of the factors that influence the gold lease rate, setting the scene for the subsequent model development and analysis. Literature Review: This chapter presents a comprehensive review of existing literature on gold, the gold price, and the gold lending market. It examines the roles of central banks in the gold market, analyses historical gold price behavior, explores hedging strategies, the impact of inflation, and the use of gold as a safe-haven investment during economic shocks. The chapter meticulously reviews various theories and models that attempt to explain the gold lease rate's behavior and the interplay between gold prices and interest rates. This careful literature review is crucial in informing the creation of the model presented in the following chapter, providing context and grounding the thesis within existing research. The Gold Lease Rate Model: This chapter presents the core model of the thesis, explaining the determinants of the gold lease rate. It incorporates factors such as central bank gold supply, gold producer demand for hedging, and bullion bank demand for gold. The derivation of the model is explained thoroughly, highlighting the underlying assumptions and their implications for the model's accuracy and predictive power. This chapter is essential as it is the theoretical foundation upon which the empirical analysis in the subsequent chapters rests, providing a specific framework to explain market dynamics. Data: This chapter presents the data used in the empirical analysis. It outlines the data sources, explaining how the data were collected, cleaned, and prepared for use in the model. The careful detail in data description highlights the study's rigor and ensures reproducibility. This is essential as the reliability and accuracy of the final results directly depend on the quality and appropriateness of the data used. Model Analysis and Results: This chapter presents the results of the empirical analysis of the gold lease rate model. It thoroughly examines the relationships between the gold lease rate and various explanatory variables, such as expected inflation and economic shocks. The analysis includes regression results and statistical tests, which assess the statistical significance and economic relevance of these relationships. The analysis of the silver leasing rate provides a comparative perspective on the dynamics of precious metal markets. By comparing the gold lease rate and the silver lease rate, insights are gained into factors driving lease rates across different precious metals.Keywords
Gold lending market, gold lease rate, central banks, gold price, hedging, inflation, economic shocks, speculation, model analysis, regression, precious metals, convenience yield, bullion market.
Frequently Asked Questions: Analysis of the Gold Lending Market and the Gold Lease Rate
What is the main topic of this thesis?
This thesis analyzes the gold lending market and develops a model to explain the gold lease rate. It investigates the factors influencing this rate and explores their interrelationships, including the roles of central banks, speculation, and economic shocks.
What are the key themes explored in this research?
Key themes include the mechanics of the gold lending market, the development and testing of a gold lease rate model, the influence of central banks, the impact of speculation and economic shocks, and a comparison of gold and silver lease rates.
What is the structure of the thesis?
The thesis is structured as follows: Introduction, The Gold Lending Market, Literature Review, The Gold Lease Rate Model, Data, and Model Analysis and Results. Each chapter progressively builds upon the previous one, leading to a comprehensive analysis.
What aspects of the gold lending market are covered?
The thesis covers the bullion market, different transaction types (loans and swaps), central bank gold lending policies, the development of gold leasing rates, and the influence of various market participants.
What does the literature review encompass?
The literature review examines existing research on gold, gold prices, the gold lending market, central bank roles, gold price behavior, hedging strategies, inflation's impact, gold as a safe haven, and theories explaining the gold lease rate's behavior.
How is the gold lease rate model developed?
The model incorporates factors like central bank gold supply, gold producer demand for hedging, and bullion bank demand for gold. The derivation of the model is explained, highlighting underlying assumptions.
What data is used in the analysis?
The chapter on "Data" details the sources, collection methods, cleaning processes, and preparation of data used in the model's empirical analysis. The emphasis is on ensuring the data's quality and appropriateness for the research.
What are the key findings of the empirical analysis?
The analysis examines relationships between the gold lease rate and explanatory variables (expected inflation, economic shocks, etc.). Regression results and statistical tests assess the significance and economic relevance of these relationships. A comparison with silver lease rates is also included.
What are the keywords associated with this research?
Keywords include: Gold lending market, gold lease rate, central banks, gold price, hedging, inflation, economic shocks, speculation, model analysis, regression, precious metals, convenience yield, bullion market.
What is the overall objective of this thesis?
The primary objective is to provide a thorough analysis of the gold lending market and create a robust model explaining the gold lease rate, considering various influencing factors and their interactions.
What is the significance of this research?
Understanding the dynamics of the gold lending market is crucial for broader financial markets. This research contributes to a deeper understanding of this market and provides a valuable model for analyzing the gold lease rate.
- Citation du texte
- Diplom-Kaufmann Christian Bohm (Auteur), 2010, The Gold Lending Market, Munich, GRIN Verlag, https://www.grin.com/document/164552
