I was delighted to speak in Hong Kong earlier this week at the Asian launch of the Thomson Reuters GFMS Gold Survey – a long-established and highly-regarded source of analysis on the gold markets.  CME Group is a sponsor of this year’s edition, but the value for us goes far deeper than this.

The report – the second update to Gold Survey 2011 released last April – contains a wealth of information, including some fascinating insight into gold consumption during 2011.  For example, as a result of the rise in price during the past few years, world investment – the sum of all categories of investment in gold – reached a record $80 billion, up more than 20 percent on 2010.  Physical forms of investment drove this record, particularly net bar purchases at almost 1,200 metric tons — up more than 33 percent.

While these facts in and of themselves are eye opening, it is the conclusion of the analysis of last year’s unprecedented price volatility that will catch the eye of risk managers.  The report concludes with an prediction for 2012, which has prices topping out at $2,000 an ounce, along with a longer term outlook for prices.

Philip Klapwjik, global head of metals analytics at GFMS Thomson Reuters, discussed the full report in an interview, which you can watch here.

Having followed the price’s fluctuations on its way to record highs in 2011, participants in the gold market will no doubt be watching not only the price of gold, but also its volatility. At CME Group, we continue to offer a range of risk-management products for organizations exposed to gold price volatility.  Gold’s influence reaches more deeply into the global economy than probably any other commodity and a transparent, liquid market is essential to ensuring the efficient transfer of risk.  GFMS has provided the insight; we are ready to provide the means to enable customers to act.

Harriet Hunnable is the managing director of metals products at CME Group.