Research

Gold ended August lower m-o-m, down 2% to US$1,715.9/oz – its fifth consecutive monthly decline.  The promising bounce that began in mid-July ran out of steam in mid-August after failing to break the US$1,800/oz resistance level.

Throughout April, gold remained among the best performing assets in 2022 up 5% in US dollar terms – yet it ended the month 1.6% lower at US$1,911/oz.

Geopolitical crisis takes centre stage in February

In 2021, the 56% y-o-y rise in China’s gold consumption marked a strong comeback from 2020. 

Gold benefits from diverse sources of demand: as an investment, a reserve asset, jewellery, and a technology component. It is highly liquid, no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time.

Gold may face similar dynamics in 2022 than those from last year as competing forces support and curtail its performance. 

The shift to risker and less liquid assets strengthens the case for an allocation to gold, given its unique combination as a highly liquid, low-volatility asset.