Insights

In this episode of Unearthed, hosts Joe Cavatoni and John Reade unpack the latest gold market trends from May, including ETF outflows and a split between institutional interest and softer retail demand in the US.

Last week, the US labor market showed some resilience; factory activity slowed in the US and China but improved in the Eurozone.

Central banks added a net 11t to global gold reserves in April, the second consecutive month of slower accumulation.

Gold is not currently classified as an HQLA under Basel III, but its performance during time of crisis rivals that of intermediate and long-term Treasuries. In this context, gold is an HQLA in all but name.

Last week, markets were dominated by a mix of tariff headlines and strong US tech earnings. Meanwhile, inflation cooled in the US and Europe but picked up in Japan.

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni are joined by Reinhard Cluse, Chief European Economist at UBS, to explore the shifting dynamics of Europe's economy and the potential outlook for the months and years ahead. Reinhard discusses the structural challenges Europe has faced over the past decade and how these will influence the upcoming year.

Trade tensions flared up again last week amid a mixed global economic backdrop, with activities in the US, China, and India showing signs of strength, while Europe and Japan lagged. China cut rates while the US House passed a bill to extend tax cuts and spend more.

Investors need to be cautious of the risks of relying too heavily on historic correlations that are prone to change. When the bond-equity correlation flips from negative to positive, a larger allocation to gold is required to retain the initial level of portfolio risk.

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni, Senior Market Strategists at the World Gold Council, discuss the highlights from the Q1 Gold Demand Trends Report.

Last week, optimism from a US – China tariff truce and easing inflation was tempered by slower US spending, a sharp drop in China’s bank lending, and Japan’s economic slowdown, even as Europe posted strong growth. Moody’s became the last of the three ratings agency to downgrade the credit rating of the US late on Friday. While the technical fallout may be minimal, it could usher in a sentiment hit on Monday.

Stability in prices could prompt a resurgence in demand. Consumer sentiment that the downside to gold prices is limited would reinforce gold’s appeal as a reliable investment.

Continued gold price strength and the US-China trade tensions pushed Chinese gold ETF demand to a record high in April. Gold futures trading activities in Shanghai also surged to unseen levels. Wholesale demand improved and the PBoC announced another gold purchase.

Last week saw a raft of central bank announcements: the Fed kept rates unchanged, while China and the UK cut. Meanwhile, trade tensions eased as the US reached a deal with the UK and began talks with China. Key events to watch this week include changes in global trade uncertainties, US CPI prints and gold market positioning shifts.

Last week, markets absorbed strong US earnings and labor data, steady BoJ policy, weak Chinese factory activity, and stronger EU growth, reflecting mixed global momentum.

Central banks continue momentum of gold purchases into March 2025.

Last week, market volatility continued, but signs of easing trade tensions emerged. Concerns over the Fed’s independence also eased. But the IMF downgraded global and regional growth forecasts amid trade risks.

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni, Senior Market Strategists at the World Gold Council, welcome George Cheveley, Portfolio Manager at Ninety One, for an insightful look into the dynamics of the gold mining equities market.

Tariff uncertainty continued to weigh on global markets last week. Weak US data and new chip export restrictions on China added to concerns. Growth worries drove ECB rate cuts while China’s economy showed resilience in Q1.

Seasonal and wedding related purchases may support gold demand this month and next. Investor interest is likely to strengthen as gold’s appeal as a safe-haven asset and portfolio diversifier heightens amid global economic uncertainties and financial market volatility.

Another exceptional month for the gold price and trade tensions with the US led to continued boom in retail investment. Meanwhile, China’s official gold holdings rose five months in a row. And wholesale demand also picked up seasonally, resulting in an improving local gold premium.