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On February 5th, stock markets suffered one of their more precipitous falls in recent years. The gold price rose but, as stocks partly retraced their losses, gold trended lower.

India, a nation that accounts for around a fifth of annual global gold demand, has a long history of gold-focused policies. These, however, have often distorted the market rather than achieving policymakers’ aims. Announcements in the Union Budget on 1 February 2018, however, suggest this might change.

The World Gold Council is pleased to announce the release of its "Guidance for Monetary Authorities on the recommended practice in accounting for monetary gold".

Ezechiel Copic, Director, Central Banks and Public Policy in conversation with Kenneth Sullivan, author of the new report Guidance for Monetary Authorities on the recommended practice in accounting for monetary gold on why the World Gold Council commissioned this guidance and how it can benefit monetary authorities.

Gold demand rallied in the closing months of 2017, gaining 6% year-on-year (y-o-y) to 1,095.8 tonnes (t) in Q4. But it was too little, too late: full year demand fell by 7% to 4,071.7t. 

In recent years, buy-and-hold investors such as pension funds, endowments, insurance companies, and sovereign wealth funds (SWFs) have gradually increased their investments in alternative assets to diversify their portfolios and boost returns. ‘Alternatives’ make up 23% of SWF portfolios and 24% of global pension funds, up from single digits in 2000.

Natalie Dempster, Managing Director, Central Banks & Public Policy at the World Gold Council in conversation with Will Jackson-Moore, Global Private Equity & Sovereign Investment Fund Leader at PwC on gold and alternative asset classes for Sovereign Wealth Funds.

Some commentators went as far as to claim cryptocurrencies could replace gold. Cryptocurrencies may become an established part of the financial system. But, in our view, gold is very different from cryptocurrencies.

Gold is a highly liquid yet scarce asset, and it is no one’s liability. It is bought as a luxury good as much as an investment. As such, gold can play four fundamental roles in a portfolio.

In 2017, investors added gold to their portfolios as incomes increased, uncertainty loomed, and gold’s positive price momentum continued. As 2018 begins we explore four key market trends and their implications for gold.