Gold Price Performance & Data World Gold Council
The Russia–Ukraine war added an additional layer to this, as investors sought high-quality safe havens like gold amid equity market volatility and compounding unanticipated inflation pressures, including record oil prices. Diversification does not guarantee investment returns and does not eliminate the risk of loss. World Gold Council and its affiliates and subsidiaries (collectively, “WGC”) provide no warranty or guarantee regarding the functionality of the tool, including without limitation any projections, estimates or calculations. Not only is the long-standing trend in central bank gold buying firmly intact, it also continues to be dominated by banks from emerging markets. Ten central banks reported increased gold reserves (of a tonne or more) during Q1, all of whom have been active over recent quarters. And despite the high bar set in the last two years, the voracious buying has continued into 2024 in the face of the renewed gold price rally.
- World Gold Council does not guarantee the accuracy or completeness of any information and does not accept responsibility for any losses or damages arising directly or indirectly from the use of this information.
- The Gold Outlook 2022 outlined our expectation for the competing forces of higher, more persistent inflation and rising rates to be the biggest influences on gold’s performance.
- Global gold ETFs shed an estimated US$809mn (12t) during the first week of November, with the bulk of outflows stemming from North America, which were partially offset by strong Asian inflows.
- 1Recent comments from BoE Governor Andrew Bailey about a « historic shock » to UK growth and incomes could easily be echoed in other key markets.
- Diversification does not guarantee investment returns and does not eliminate the risk of loss.
Gold’s Contribution to Society
A prolonged conflict in Ukraine will likely result in sustained investment demand. In contrast, a swift resolution, something which we all hope for, may see some tactical positions in gold unwind, but much like in 2020 we believe significant strategic positions will remain. Added to the dollar and yield impact are concerns that cryptocurrencies are now currying more favour with the incoming US administration. And equity markets, particularly in the heavily weighted technology sector, have been given a further boost from expected ‘business-friendly’ policies. This information is not a recommendation or an offer for the purchase or sale of gold or any products, services, or securities.
We are a membership organisation that champions the role gold plays as a strategic asset, shaping the future of a responsible and accessible gold supply chain. Our team of experts builds understanding of the use case and possibilities of gold through trusted research, analysis, commentary, and insights. We drive industry progress, shaping policy and setting the standards for a perpetual and sustainable gold market. Physically-backed gold exchange-traded funds (gold ETFs) are an important source of gold demand, with institutional and individual investors using them as part of well-diversified investment wcg gold price strategies. A time series of the difference between international US$ gold price and the local gold price paid by Indian and Chinese consumers in their respective markets.
The combination of higher inflation and interest rates has already led to an increasingly flatter 2/10 US Treasury yield curve, which inverted towards the end of March (Chart 2). Since September 2021, the 2-year yield has increased by almost 2% compared to a near 1% move in 10-year yields, with the spread between the two narrowing to 19bps. Inversion of the Treasury yield curve is usually considered a signal of an impending recession, which could also provide an element of support for gold investment. Central banks continued to buy gold apace, adding 290t to official global holdings during the quarter.
An increasingly complex geopolitical and financial environment is making gold reserves management more relevant than ever. In 2023, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022. This marks the 17th consecutive monthly increase, helping to lift its reported gold holdings to 2,262t (16% higher than at the end of October 2022 when it resumed reporting monthly additions). The data indicates that this is the PBoC’s longest ever reported streak of monthly additions to its gold reserves.
Global gold demand stays strong, supporting record-high prices
Notably, outflows were seen across major markets in the region – unlike previous months where the UK bore the brunt of losses. Rebounding yields in the region pushed up the opportunity cost of holding gold and are likely a major driver. Similarly, UK Gilt yields also edged higher during the month, prompting gold ETF outflows. North American funds have witnessed four consecutive months of inflows, adding US$2.7bn in October. Continued gold ETF buying may have come as a surprise to many as yields rose and the dollar strengthened, leaving investors re-thinking the future interest rate path amid robust US economic performance. In what was an interesting quarter for the gold market, central banks made clear their commitment to the longstanding trend of gold buying.
Trading volumes
The People’s Bank of China carried its recent momentum into Q1, reporting an addition of 27t to its gold reserves during the quarter. October’s US$68mn inflows were once again mainly driven by Australian and South African funds. In Australia the weakening Aussie dollar enlarged gold’s return locally and likely pushed up investor currency hedging needs, contributing to the region’s fifth consecutive monthly inflow.
November review
Gold ETFs continued to see outflows with global holdings falling by 114t, led by North American and European funds but slightly offset by inflows into Asian-listed products. China generated the bulk of that increase, with renewed investor interest in gold due to the weakening local currency and poorly performing domestic equity markets. Solid inflows into global gold ETFs in Q3 helped drive 5% y/y growth in total gold demand to a record 1,313t. This was reflected in the gold price, which reached a series of new record highs during the quarter. Y-t-d global gold ETF demand – led by Asia – has turned positive (+18t) for the first time this year. Supported by recent inflows and the rocketing gold price, total assets under management (AUM) have soared by 33%.
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