BAKU, Azerbaijan, December 29. This year has been marked by significant shifts in the global jewelry market, driven by a combination of economic, geopolitical, and market factors, Deputy Chairman of the Azerbaijan Jewelers Association Public Union and Chairman of Technical Committee for Standardization of Precious Metals and Precious Stones Rovshan Amirjanov told Trend.
In an exclusive interview with the agency, Amirjanov said that changes in gold prices this year are a result of several key economic and geopolitical events.
He highlighted that expectations of a reduction in interest rates in the United States led to a rise in gold prices, although the US Federal Reserve's (Fed) initial rate changes caused a temporary dip. The overall decline in inflation and the anticipation of future rate cuts positively affected the gold market.
"Geopolitical tensions in the Middle East and the Russia-Ukraine conflict caused a significant rise in gold prices. Additionally, uncertainty surrounding the US presidential elections contributed to fluctuations in the market. The election results and the strengthening of the US dollar caused a temporary drop in gold prices, but the market later stabilized.
Broader global economic conditions, such as the economic downturn in China and Europe, have been crucial factors influencing global markets, including precious metals," the expert said.
Currently, the price of gold on the London Metal Exchange is hovering between $2620 and $2630 per ounce, while silver is valued at around $30 per ounce, Amirjanov pointed out.
"Meanwhile, platinum is trading between $930 and $950 per ounce, and palladium fluctuates between $920 and $980 per ounce. Given current economic and geopolitical trends, long-term growth in precious metal prices, particularly gold, is forecasted.
Despite market expectations that gold might exceed $3000 per ounce, the prices of gold and silver in Azerbaijan reflect these global market shifts. Locally, gold prices have been steadily rising in line with international markets," Amirjanov added.
The expert also emphasized that the global increase in gold prices directly influences the sector in Azerbaijan, where higher global prices increase domestic demand and the cost of imported gold products.
"The rise in global prices has driven up demand in our country and led to higher costs for imported gold products. This trend underscores the growing strategic significance of gold, capturing the attention of both consumers and investors. As global prices reach record highs, the Azerbaijani gold market continues to adjust to these evolving conditions," he noted.
Azerbaijan saw varying trends in the production of gold and silver from January through November this year. During this period, the country produced 2,567.2 kg of gold, marking an increase of 59.3 kg, or 2.4 percent, compared to the same time last year, according to the State Statistics Committee.
In contrast, silver production during the first 11 months of the year totaled 3,064.2 kg, a decline of 698 kg, or 18.5 percent, from the previous year.
Amirjanov explained that the different production dynamics of gold and silver in Azerbaijan are linked to the availability and development of natural resources.
"Gold deposits are more productive, and the efficient development of these reserves has led to an increase in production. The favorable geological and technical conditions for gold mining further support this upward trend. In contrast, the depletion of silver reserves or challenges in exploiting silver deposits can stem from both technical and economic factors. These challenges are primarily linked to the depletion of natural resources in existing deposits and the impact of global market fluctuations.
To address these issues, one of the main priorities is the introduction of modern technologies to ensure more efficient extraction from existing reserves. Additionally, ongoing geological exploration in the country aims to identify new potential silver deposits.
The differences in gold and silver production can also be attributed to global market dynamics. The rise in gold prices on international markets has sparked increased interest in gold mining, as the higher market value of gold makes its extraction more economically attractive.
Since the beginning of the year, Azerbaijan has seen growth in both gold production and exports. Projections suggest that these figures will surpass those of previous periods, reflecting continued positive trends in the sector,” he added.
With only a few days left until the end of the year, the question arises: Could gold prices rise on the domestic market during this period?
In response, Amirjanov explained that while demand for precious metals, including gold, typically increases ahead of the New Year holidays, any price fluctuations will largely depend on global market conditions.
"Holiday seasons are traditionally a time of heightened interest in precious metals and jewelry. Increased demand can drive up gold prices in the domestic market. In addition to global price changes, local demand also plays a significant role in pushing up the cost of gold," he concluded.