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Over the past two months, economic growth has disappointed even as inflation has exceeded expectations. A real risk of stagflationary conditions, with rising costs amid lower growth, appears to be on the cards.

Gold struggled in September amid general weakness in financial assets

Gold fell in September by 4% to around US$1,743/oz. This was the second consecutive month of declines, with gold now over 8% lower y-t-d. Gold wasn’t alone. Treasuries, Corporates, US- and non-US equities all fell in September possibly as a result of deleveraging. The Q2 level of margin debt for equities was at a record high. It would be understandable if some leverage has been removed as we head into the historically volatile month of October. And it’s quite possible that this de-leveraging has affected most assets (energy and industrial metals excepted).

This year marks 50 years since the end of gold’s formal link to currency. In the half-century that has passed since this milestone, the world has evolved in ways that were probably unimaginable to the political and economic leaders of that time. As the world has changed, so too has the role of gold. Whereas central banks steadily sold down their gold reserves for several decades after the end of the Bretton Woods system, they have since re-emerged as net buyers of gold for the past eleven years, with emerging market countries leading the way.

Climate change is both a physical reality and a rapidly growing systemic and existential risk that all aspects of society are currently learning to address. It is now widely understood that greenhouse gas (GHG) emissions must therefore decrease very rapidly – ultimately, to ‘Net Zero’ – if we are to avoid potentially catastrophic consequences. The process of decarbonising the economy is such an urgent priority that it is currently reshaping nearly all policy, business, and investment decisions.

A better gold valuation tool for investors

We launched Qaurum^SM 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.

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.

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.