Insights

Global average All-in Sustaining Costs (AISC) in the gold mining industry were US$1,129/oz in Q4’21, almost unchanged from the previous quarter.

Since the Global Financial Crisis, it has been a turbulent ride for investors the world over. Europe has certainly been no exception: investors in the region have had to adapt to a high-risk environment. And as COVID-19 has introduced a new set of challenges to portfolio construction and return generation, robust risk management strategies are a top priority; wealth protection is as important as growth.

All-in Sustaining Costs (AISC) across the gold mining industry averaged US$1,123/oz in Q3’21, a rise of 4% q-o-q and the highest level since 2013. This is the fourth consecutive quarter of cost growth, with the average AISC up a significant 16% since the corresponding quarter in 2020.

Our latest Gold Demand Trends report takes a detailed look at the global gold market in the third quarter. The fact that gold demand so far this year is down 9%, while the average gold price over the same period was 4% higher, exemplifies gold’s diversification benefits, thanks to its varied roles as an investment, consumer good and a reserve asset.

Explore India's gold market in September: gold prices, retail demand, RBI purchases and more!

Gold prices fell in September. The LBMA Gold Price AM in USD and the Shanghai Gold Benchmark Price (PM) in CNY declined by 4.6% and 4.3% respectively last month. The rising interest rate, outflows from global gold ETFs, and a stronger dollar all contributed to gold price weaknesses in September.

In the recently published 2021 Alternative Assets in Europe report, one thing is clear: alternative assets are en vogue amongst European investors.

We’ve regularly discussed rates and inflation in 2021 as two key drivers of global markets. With lower expected future returns on fixed income, these drivers give credence to the idea that many institutional investors would need to move further out on the curve (take more risk) and/or use leverage to meet their financial obligations. Both of which now appear to be happening.

Retail demand was mixed in June: moderate strength in the first half of the month was followed by a softening of demand in the second half due to an absence of wedding dates. Official imports rebounded with easing of lockdown restrictions and the local market flipped back to discount as demand softened from mid-July onwards

Explore China's gold market in July - gold price, consumer demand, outlook and more!

While the possible outcomes of the three-child policy and various supporting measures remain uncertain, we believe there is a link between birth rates and gold consumption, and the details are worth analysing.

Watch our webcast with Bridgewater and Coalition Greenwich for a timely and incisive discussion on post-pandemic portfolio allocation and looking ahead, the outlook for the second half of 2021.

Watch Maybank Asset Management’s global market outlook webinar, where we discuss topics including gold’s role as an inflation hedge, how monetary and fiscal policy impacts gold and more!

Monday, July 19 marked an eagerly anticipated milestone for the UK. ‘Freedom Day’ as it was dubbed, officially closed the chapter on over a year of local COVID-19 restrictions. But it arrived amidst soaring cases of COVID-19 worldwide – the UK included. Concern over the new variant strains has not only put a dampener on the reopening in the UK, but perhaps the global economic recovery.

Retail demand improved as lockdowns eased, while the correction in the domestic gold price lured local investors towards gold ETFs. The Reserve Bank of India (RBI) added 9.4t of gold to its reserves in the month increasing its total gold reserves to 705.6t.

International gold prices fell steeply in June. The weakness in the gold price can be largely attributed to the more-hawkish-than-expected monetary-tightening signals from the US Federal Reserve’s meeting on 18 June.  But the decline in the RMB gold price was narrower than that of the USD gold price, thanks to a 1.6% depreciation in the CNY against the dollar last month. 

I was pleased to speak at Fund Selector Asia's recent Spotlight on Alternatives virtual event. Watch the replay to hear my perspective on topics including: gold's characteristics, and why they may be attractive to investors in alternative assets, what makes gold a strategic asset and the drivers of gold performance.

Summary

• The domestic gold price ended 5.1% higher in May at Rs48,993/10g 
• Retail demand collapsed amid COVID-induced lockdowns in the country 
• Indian official imports slowed and the local market flipped to discount 
• Monthly inflows into gold ETFs slowed as higher returns lured investors towards the equity market. Total holdings for Indian gold-backed ETFs (gold ETFs) reached 33.2t by the end of May; a net inflow of 0.1t (Rs2.9 bn; US$39mn)
• The Reserve Bank of India (RBI) added 0.9t of gold to its reserves in the month increasing its total gold reserves to 696.2t.
   

Explore China's gold market in May - gold price, consumer demand, outlook and more!