The rapid rise in the gold price during March raised several questions. One of these was whether central banks – whose demand has been posited as a key reason for the recent rally – would change their gold buying behaviour in response.
In this episode of "Unearthed," hosts Joe Cavatoni and John Reade speak with George Burns, President and Chief Executive Officer, Eldorado Gold, discussing critical minerals and the role of gold in our world.
International and domestic gold prices moderated from the April peaks but ended the month with gains following the notable price rise of March. After a weak March and April, there was resurgence in gold demand around the Akshaya Tritiya festival. Domestic gold prices continue to trade at a discount in relation to the international prices, but the discounts have narrowed from a month ago. Meanwhile, the RBI added to its gold reserves in April and gold ETFs witnessed outflows for the first time in 12 months.
In Q4’23 gold miners’ global average all-in sustaining costs (AISC) rose again, up 2% q/q to US$1,342/oz as persistent cost inflation and a tight labour market continued to influence on-site operating costs. There is a silver lining however, because the rate of increase is slowing and the higher gold price has eased pressure on producer margins.
In April, China’s wholesale gold demand climbed further as strong investment demand canceled off jewellery sector weaknesses. Chinese gold ETFs registered their strongest month on record whilst the local central bank announced gold purchases for the 18th consecutive month.
Central banks reported 16t of net buying in March via the IMF and other public data sources. Demand remained healthy: monthly gross purchases were steady m/m at 40t, partly offset by gross sales of 25t.
International and domestic gold prices have risen to unprecedented levels. The price surge has impacted jewellery demand but stimulated investment (bar and coin) demand. Domestic gold prices continues to trade at a discount in relation to the international prices. Meanwhile, the RBI added to its gold reserves in March, inflows into gold ETFs moderated and imports saw a sharp fall.
In March, China’s official gold holdings rose for the 17th consecutive month and inflows into local gold ETFs continued. Meanwhile, withdrawals from the Shanghai Gold Exchange fell slightly, leading to a lower local gold price premium. Nonetheless, wholesale demand recorded the highest Q1 total since 2019.
Data for February shows that reported global central bank gold reserves rose by 19t, the ninth consecutive month of growth. At the same time February’s buying was 58% lower than January’s total of 45t.
International and domestic gold prices alike touched record high in early March. The price surge presents headwinds for gold demand, even in the face of the ongoing wedding season. Domestic gold prices is trading at a discount in relation to the international prices with demand being crimped by high prices. Meanwhile, the RBI added to its gold reserves in February, inflows into gold ETFs maintained positive momentum and imports saw a sharp rise.
Wholesale gold demand in China was healthy during February and the local central bank reported its 16th consecutive monthly gold purchase. Meanwhile, Chinese gold ETFs continued to attract investors. Supported by steady demand, the local gold price premium stayed elevated. But gold consumption may cool in coming months due to seasonality and the record-level gold price.
Gold has reached continuous highs in March and is trading close to US$2,200/oz. While this can be partly explained by a weaker USD, higher risk and momentum, other factors such as ‘technicals’ and OTC activity likely accelerated the move.
In January, central banks reported that they increased global official gold reserves by 39t. This was more than double the (revised) December net purchases of 17t, and the eighth consecutive month of net purchases.
In this insightful episode hosted by John Reade and Joseph Cavatoni from the World Gold Council, guest Karim Chedid, Head of EMEA Investment Strategy for iShares and a Managing Director at BlackRock, discusses the current macroeconomic environment.
The extended 2024 Chinese New Year’s holiday saw healthy gold consumption. Looking ahead, our model predicts stable gold jewellery demand in 2024. And gold bar and coin investment may stay above their long-term average, with some further upside potential.
International and domestic gold prices alike retreated in January. Prices nevertheless remain high and this has been impacting gold jewellery demand in India. Gold imports too have moderated. Domestic gold prices began to trade at a premium to international prices since late January following nearly three months of trading at a discount. Meanwhile, the RBI made the highest monthly purchase of gold in eighteen months in January and Indian gold ETFs continue to see inflows.
During the first month of 2024, wholesale gold demand in China jumped ahead of the Chinese New Year’s holiday in mid-February, recording the strongest January ever and lifting the local gold price premium. Meanwhile, the PBoC stretched their gold buying spree to 15 months and gold ETFs in the region once again attracted inflows.
Last week, we held an investor webinar with a focus on geopolitics, macro-economics and asset allocation in 2024. Joe Cavatoni, our Market Strategist for the Americas was joined for an insightful dialogue with two seasoned investment experts.
