Gold-backed exchange-traded funds and similar products (gold ETFs) have flourished since their introduction in 2003, attracting both institutional and retail investors across the globe. Recently, gold has become globally accepted as a strategic asset amidst a high-risk and low-rate environment spurring investment demand and the expansion of the gold-ETF market.
Demand for gold loans, both through banks and non-banking financial companies (NBFCs) has grown in response to the economic impact of the COVID-19 pandemic.
China’s physical gold investment market has come a long way since its liberalisation in 2004. Primarily driven by the strong economy, retail physical gold investment demand in mainland China has surged by nearly 17 times in the past 16 years, accounting for nearly one third of the world’s total annual bar and coin demand in 2019.
Strong growth in global investment demand for gold in Q3 partly offset weakness elsewhere as COVID-19 remained in the driving seat.
Gold-backed ETFs and similar products (gold ETFs) recorded their tenth consecutive month of net inflows during September, matching equivalent stretches in 2008 and 2016. Gold ETF holdings increased by 68.1 tonnes (t) (US$4.6bn) or 2.0% of assets under management (AUM) despite gold’s worst monthly price performance since November 2016. Global net inflows of 1,003t (US$55.7bn) in 2020 have led overall gold investment demand and taken the gold ETF holdings universe to a fresh new all-time high of 3,880t and US$235bn in AUM.
This report looks at how World Gold Council Members are bringing about positive change across four thematic areas: global partnerships; social inclusion; economic development and responsible energy use and environmental stewardship.
Gold-backed ETFs and similar products (gold ETFs) recorded their ninth consecutive month of inflows in August, albeit at their slowest pace for 2020. Collectively, gold ETFs added 39 tonnes (t) during the month, equivalent to US$2.2bn or 0.9% of assets under management (AUM) as the price of gold reached a record high of US$2,067 early in August. As equities continued to climb to new all-time highs, interest rates rose and yield curves steepened, investor positioning in the gold market consolidated later in the month and the gold price ended the month slightly lower (-0.38% or US$1,957/oz) for the first time in five months.
In this paper, we seek to answer those questions by assessing how gold lease rates have been affected in the past through changes in the demand to borrow gold and the supply of gold available for lending.
Our analysis illustrates that adding between 2% and 10% of gold to an average, Singapore-based institutional portfolio since the onset of the financial crisis would have resulted in higher risk-adjusted returns