Insights

Gold has gained 3% this week largely attributed to an escalation of geopolitical tensions linked to the Israeli-Palestinian conflict.

Central banks collectively increased their gold reserves in August for the third consecutive month. They reported adding 77t to global official reserves during the month, a 38% up-tick from July’s buying. Recent buying has reinforced our confidence that the long-term trend of healthy central bank demand remains in place.

Determining the value of gold can at times make potential investors hesitant. Unable to judge what the price might do, reduces confidence in making an informed decision. Recently, gold in Australian Dollars (AUD) reached its highest ever price and breached A$3,000. While dipping slightly by the end of the first half of 2023, when is the right time to buy, or even increase, a gold allocation into a portfolio?

We’re delighted to contribute another thought-leader article published in Financial Investigator’s highly regarded magazine. In their September issue, we review the notion that whilst bonds may be en vogue, gold never goes out of style. The article supports our ongoing belief that gold has a key role to play as a strategic long-term investment and mainstay allocation within a well-diversified portfolio.

A lot has been made of the convergence of yields for cash, bonds and equities (on an earnings yield basis), with the higher yield on offer in the cash space leading many investors to reassess their portfolio exposures.

Annual gold production rank in 2022 was unchanged y/y amongst the five largest gold producing nations, with China still the world's largest gold producer. Extending this to the top 20 countries, things look very different compared to 2010. But, more broadly, global gold mine production remains geographically diverse.

The latest Gallup Poll Social Series monitoring public opinion on economy and finance shows that gold jumped into second place as ‘best long-term investment’ in the US this year.

Record central bank gold buying last year shone a spotlight on the past, present and future of gold as a reserve asset. There are compelling reasons to expect continued buying from this sector

A ceiling on interest rates and headwinds to trend growth make a compelling case for gold in the medium term.

Gold prices weakened in February. There was a 5% decline in the LBMA Gold Price AM in USD during the month. Meanwhile, due to a 3% depreciation in the RMB against the dollar, the SHAUPM in RMB saw a smaller fall of 1%

Gold prices kicked 2023 off to a strong start. The SHAUPM in RMB registered a 2% gain in January and the LBMA Gold Price AM in USD rose by 5%.

The divergence between the RMB and USD gold prices widened. The weakening US dollar and lowering yields helped pushed the LBMA Gold Price AM in USD 7.4% higher in November, the best month since July 2020.

Average all-in sustaining costs (AISC) in the gold mining industry increased by 1% q-o-q in Q3’22, reaching a new record high of US$1,289/oz.

The domestic gold price diverged from the international gold price: the MCX Gold Spot price rose marginally by 0.2% compared to a 2% decline in the LBMA Gold Price AM in USD

Gold’s price divergence continued: the Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 1%, while the LBMA Gold Price AM in USD saw a 2% fall in October.