Gold Investor, July 2018

Published 5th July 2018

In the news

Responsible investment and gold

Trade bodies and gold industry representatives are issuing new guidelines for producers and refiners, designed to address investor concerns over environmental, social and governance issues. The World Gold Council has launched a consultation process on the Responsible Gold Mining Principles, a new framework intended to show investors, suppliers and consumers that their gold has been produced responsibly. The London Metal Exchange is launching responsible sourcing guidelines as well, while the London Bullion Market Association is introducing new standards this year to ensure that gold in London comes from sustainable sources

Markle's golden sparkle

US gold jewellery demand rose to levels not seen since 2009 in the first quarter of this year, heralding a mood of optimism across the industry. Jewellers attribute gold’s renewed popularity to the Duchess of Sussex, Meghan Markle, who is a keen advocate of yellow gold. US sales of yellow gold rose around 30% in the run-up to the Royal wedding in May between US actress Markle and the UK’s Prince Harry.

Research from the World Gold Council indicates that celebrity purchases have a definite influence on jewellery sales. In a 2016 survey, 22% of respondents said they were inspired by magazines and newspapers when buying jewellery or luxury fashion, while a further 11% were directly influenced by celebrities.

Markle revealed last November, when her engagement to Prince Harry was announced, that yellow gold is her favourite precious metal.

New, low-cost ETF from the World Gold Council

The World Gold Council1 has launched a new exchange-traded fund (ETF), the SPDR® Gold MiniShares℠ Trust. Trading as GLDM, at launch the new ETF offered the lowest available total expense ratio among all gold exchange-traded products, with a net and gross expense ratio of 0.18 percent.2 In line with other low-cost gold ETFs, GLDM broadens the range of gold investment products and is designed to appeal to investors with longer-term investment horizons. GLD, the largest gold-backed ETF, was launched by the World Gold Council in 2004 and remains highly popular with many investors, as it is highly liquid and total cost of ownership is low.

Record debut for Shari’ah spot gold contract

The world’s first exchange-traded Shari’ah-compliant Spot Gold contract, DGSG, has been well received by investors since listing on the Dubai Gold & Commodities Exchange (DGCX) in March of this year. Volumes exceeded 80 kilograms, worth more than US$3.50mn, on the first day of trading alone. Interest has continued since then, with approximately US$22mn of gold – around 515kg – traded by the end of June. The product was the first of its kind to be launched in the Gulf Cooperation Council, and its early success highlights investor appetite for exchange-traded Islamic products.

Footnotes:
  1. World Gold Council is the parent of the sponsor of GLDM, WGC USA Asset Management Company, LLC.

  2. Please see each Fund’s prospectus for a detailed discussion of the risks of investing in each Fund’s shares. The GLD prospectus is available by clicking here, the GLDM prospectus is available by clicking here, You may get these documents for free by visiting EDGAR on the SEC website at sec.gov

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