Gold mining: India gold market series

India has a long history of mining gold, but at a low level: 2020 gold mine production was just 1.6 tonnes. Legacy processes are in part to blame: investment in the sector has been discouraged by unwieldy processes.

Gold ETFs inflows continue in February amid high inflation and geopolitical risk

Global gold ETFs drew net inflows of 35.3t (US$2.1bn, 1.0% of AUM) in February. Positive flows were almost evenly split between North American and European funds, continuing the year-to-date growth in Western markets and considerably outweighing outflows from Asia. Global net inflows were driven by stubbornly high inflation and a surge in geopolitical risk on the back of the Russian invasion of Ukraine, which pushed the gold price to an intra-month high of US$1,936/oz.

Gold ETFs bounce back to begin 2022 led by North American funds

Global gold ETFs drew net inflows of 46.3t (US$2.7bn, 1.3% of AUM) in January, led by North American funds – partially offsetting the region’s 2021 outflows. These combined with positive flows from Europe significantly outweighed Asian outflows. Overall, net inflows were driven largely by gold price strength and a sharp selloff in equity markets, despite a reversal in the gold price on the back of a hawkish US Fed statement towards the end of the month.

Gold Market Commentary

The LBMA Gold Price PM (US$) was marginally down in January, dipping less than 1% to US$1,795/oz. But this provides an incomplete picture of the interesting dynamics seen throughout the month.