We view the direction of the US dollar as well as the strength of Asian demand as key indicators of gold sentiment. Further, potentially reduced mine production at lower prices should, in our view, limit the downside. Finally, our research shows that gold should not be looked at in isolation but as part of portfolio and that a small strategic allocation can reduce the long-term level of risk.
We discuss the limitations of the most common arguments and contextualise gold’s price pullbacks. We examine structural shifts that gold market has experienced over the last decade resulting in a robust set of demand factors, very different from that seen during the 1970s.
The World Gold Council has conducted extensive research on gold and has demonstrated in past submissions to the Basel Committee on Banking Supervision that gold meets the fundamental and market criteria required to be considered a high quality liquid asset for Basel III.
This report looks at the future of the gold market in India. It puts in context the market for gold, and examines the strategic outlook for the Indian economy and gold demand over the next decade. There is short discourse on the mythological and cultural significance of gold in India as well as detailed econometric analysis of Indian gold demand from 1980 to 2009.