Insights

• The Shanghai Gold Benchmark price fell slightly in October as the appreciating USDCNY offset the rise in US dollar-denominated gold price. This pushed the local gold price to a discount, the first in 12 months
• Impacted by the weak performances of CNY-denominated gold prices, speculative demand dropped further. Trading volume of Au9999 continued its decline during the month on weaker physical gold demand
• During the first ten months of 2019, China’s gold imports dropped by 41% y-o-y
• Three new gold-backed ETFs were approved in October, raising the total number of gold-backed ETF products in China to seven
• The People’s Bank of China (PBoC) didn’t purchase any gold in October, leaving its gold reserves at 1,948t.

I have just come back from a short trip to India, presenting at the Gems and Jewellery Export Promotion Council’s third India Gold and Jewellery Summit in Delhi, as well as sneaking in some field research and presenting the investment case for gold to some wealth managers in Mumbai with my colleague, Mukesh.

The Beijing International Jewellery Fair kicked off on 14th November, attracting thousands of exhibitors from over 20 different countries and regions. On the coldest day so far this year in Beijing, exhibitors shared the hottest trends in the gold jewellery industry.

The UAE is an important jewellery market in the Middle East: its ten-year average jewellery demand in 2018 at 54.7t, only was second to Saudi Arabia. However, conditions in the UAE have been tough for gold in recent years.

Today we’ve published our Retail gold insights 2019 report, a thematic analysis of our new consumer research survey. With a base of 18,000 participants across India, China, Russia, Germany, the US and Canada, we believe it is the largest ever consumer survey on the global gold market.

Watch today’s Gold Demand Trends webinar where we discussed the key shifts in gold demand during Q3 2019 as the price reached a six-year high.

Last month, we launched the Responsible Gold Mining Principles (RGMPs), a new framework that sets out clear expectations for consumers, investors and the downstream gold supply chain as to what constitutes responsible gold mining. In this video, Gary Goldberg, at the time CEO of NewmontGoldcorp, Mick Wilkes, CEO of OceanaGold and I discuss why we developed the RGMPs, investor expectations around ESG and expectations as to how the mining industry will evolve over the next 5 to 10 years.

It’s old news that the world economy is suffering. Ongoing trade tensions between the US China (and elsewhere too), the draining Brexit saga, as well as a myriad of other geopolitical uncertainties, have taken their toll. Global growth is slowing, and investors are downbeat on world economic prospects. Recession in many major economies is now a real possibility... As a result, central banks around the world have been busy cutting rates.

• Indian gold imports reached just 26.3t in September 2019 – 61% lower than the same month last year.
• The domestic gold price was 2.4% lower in September compared to August, but 18.7% higher y-t-d.
• With weak physical demand, the discount in the local gold market reached a peak of US$55/oz in September, but narrowed to US$29.5/oz by the end of the month.
• Monsoon levels in 2019 are the highest for 25 years; Kharif sowing almost flat y-o-y.

• The Shanghai Gold Benchmark price saw a modest decline in September, with the local gold premium falling sharply due to the stabilising currency and increasing gold imports.
• Led by the declining gold price and the soft physical demand, both Au(T+D) and Au9999’s trading volume dropped last month while loadouts from the Shanghai Gold Exchange (SGE) levelled off.
• After hitting the lowest level since 2017 in July, gold imports to China rebounded in August.
• The People’s Bank of China (PBoC) added another 6t to its gold reserves in September. After ten consecutive purchases, the PBoC now holds 1,948t gold in its reserves.

Last week, I was delighted to be asked to speak at the inaugural Responsible Asset Owners Global Symposium in London . More and more investors are – quite rightly – thinking about how to incorporate environmental, social and governance (ESG) factors into their investment choices. But there is still a lot of uncertainty about what this means, and in particular, what framework investors should use to assess ESG performance

Yesterday, the International Monetary Fund released their updated World Economic Outlook. And, if investors were looking for any seeds of optimism, may I suggest reading The Art of Happiness by the Dalai Lama instead?

The US Federal Reserve has cut rates twice in recent months and the market expects more of the same, as economic conditions become increasingly uncertain in the US and across the globe. Gold has already benefited from the shift in sentiment and Harry Tchilinguirian, head of commodity research at BNP Paribas, believes it will continue to do so.

Today we have published our latest central bank data for August. As usual, I’ll be summarising the key highlights. But if you want to dig a little deeper, you can find our central bank data set here.

• Inflation is on the rise in China, reaching 2.8% in August 2019, the highest in 18 months; leading economists expect it to rise further by the end of the year
• African swine flu has wiped out a third of China’s pig livestock since last August, contributing substantially to the rising inflation
• Looking back at history, when inflation rose above 3% the nominal return of the local gold price has averaged 17%