Gold Investor, February 2019

Gold Investor, February 2019

In January 2009, the world was in the grip of the Global Financial Crisis. Markets were in turmoil, economies were falling into recession, policymakers were panicking.

Aram Shishmanian
CEO World Gold Council

That was when I became CEO of the World Gold Council, a time when attitudes towards gold as an investment asset were just beginning to shift.

Ten years later, as I prepare to step down as CEO, the world is in a very different place. But the repercussions of a prolonged period of stagnant economic growth still linger. Interest rates, while slowly starting to rise, remain at record lows. The US current account deficit is at an all-time high. Traditional assets are volatile, after an extensive bull run. And China’s influence is significantly greater than it was. 

In such an environment, gold’s unique attributes as an investment have become increasingly apparent. 

Back and forth

In this edition of Gold Investor, we look back to the financial crisis; we consider the effect on the gold market since then and we look to the future. 

Ken Rogoff is one of the most widely respected economists of modern times, known for his trenchant views on 
the benefits of a cashless society. Here, he dismisses cryptocurrencies but suggests that gold’s role is likely to increase as paper money is phased out (The curse of cash and the allure of gold).

Decentralised cryptocurrencies did not even exist when Paul Fisher joined the Bank of England. A senior figure at the Bank for nearly three decades and Executive Director for Markets from 2009 to 2014, he deliberates on the origins of the financial crisis and questions whether it could happen again (Reflections on the Great Financial Crisis of 2007–2009).

Complementing this analysis, John Reade, Chief Market Strategist at the World Gold Council, discusses the sustained increase in demand for physical gold among a range of investors, from Chinese savers to central banks (Gold – 10 years after Lehman Brothers failed). 

Sovereign wealth funds (SWFs) are a relatively new class  of investor. Loy Cheow Chew, who helped shape policy at the GIC, Singapore’s sovereign wealth fund, explains why gold has a valuable role to play within SWF portfolios  
(For all times’ sake).

And we take an in-depth look at central bank buying patterns, as reserve managers increase their gold holdings, often returning to the market after long absences (Central banks turn to gold). 

Increased interest in gold comes amid a growing focus among asset owners on sustainable investment. Today’s investors are keen to understand whether and how companies are responding to climate change. The gold industry is under scrutiny too but, as we explain in Gold’s role in a low-carbon economy, the impact of gold on investment portfolios is rather different from initial expectations. 

Greenhouse gas emissions are just one area where investors need clear information from business. In recognition of a growing appetite for objective, consistent and accessible data, the World Gold Council has launched Goldhub, a central repository for research and data on the gold market (Goldhub: the definitive source of gold data  and insight).

I hope you have enjoyed recent editions of Gold Investor and I particularly hope you enjoy this one, my last edition as CEO of the World Gold Council. 

Do send your thoughts to [email protected]

Aram Shishmanian

Aram Shishmanian

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