A better gold valuation tool for investors
We launched QaurumSM almost two years ago in response to a vocal need for more robust and accessible gold valuation analytics. While these exist in abundance for other asset classes, gold investors have historically had to settle for something more cursory or incomplete.
Amid strong growth in the economy, a relatively stable gold price and the effective containment of the COVID-19 pandemic, China’s gold jewellery demand in the first half of 2021 totalled 338t.
Gold-backed ETFs (gold ETFs) experienced net outflows in August of 22.4 tonnes (t) (-US$1.3bn, -0.6% AUM), as North American outflows outweighed inflows into European and Asian funds. Gold faced headwinds early in August as the dollar briefly strengthened and rising Treasury yields weighed on investment flows, triggering momentum selling shortly thereafter. Gold prices recovered late in the month, but it did not spur sufficient offsetting inflows, as global holdings fell to 3,611t (US$211bn) – the lowest tonnage level since May.
Transitory or not, inflation is already impacting consumers
Gold fell slightly during August, down 0.6% in US dollars, on modestly firmer interest rates following strong US jobs data.
Higher inflation across Europe in recent months has raised questions over when the European Central Bank (ECB) may begin to tighten monetary policy.
Reflation is good for commodities and even better for gold.
The current global economic landscape indicates improving economic conditions, higher inflation and rates expectations, as well as commodity supply shortages which are likely to support commodity performance.
Flows into global gold ETFs were marginally positive in July, with inflows of 11.1 tonnes (t) (US$669mn, +0.3% AUM). Inflows into European and Asian funds were mostly offset by outflows from large North American funds. Overall, the positive flows came alongside a recovery in gold prices, particularly in the latter half of the month amid concerns of uncertain global growth outlook and a reaffirmed commitment by central banks to continue easy money policies despite elevated inflation. Global Assets Under Management (AUM) stand at 3,636t (US$214bn), approximately 7% below the October 2020 record tonnage high of 3,909t.
Equity yields support gold as investors position for historical September strength
Q2 gold demand flat, H1 down 10%
Strong consumer demand recovery and Q2 gold ETF inflows were not enough to offset heavy Q1 outflows.
Flows into global gold ETFs were mostly flat in June, with slight inflows of 2.9 tonnes (t) (US$191mn, +0.1% AUM). Inflows into North American and Asian funds were primarily offset by outflows from European funds. Overall, the positive flows came in spite of significant gold price weakness in the latter half of the month on the heels of a relatively hawkish Federal Reserve (Fed) outlook, suggesting that investors may have taken advantage of the lower price level to gain long gold exposure. Global Assets Under Management (AUM) stands at 3,624t (US$206bn), approximately 7% shy of the October 2020 record tonnage high of 3,909t.