Insights

In recent years, expansion into tier three and four cities has been a major strategic focus for many Chinese jewellery retailers. Chow Tai Fook (CFT), a leading retailer based in Hong Kong, added 251 points of sales (POS) in lower tier cities in 2018 compared to only 50 in tier one cities. Lao Feng Xiang, another large jeweller with 3,521 POS domestically, also prioritised expansion into lower tier cities.

Gold was higher last week (XAU +1.1%, LBMA +1.2%), as markets were volatile, and the US 2/10 curve turned negative, which has historically often preceded a recession.

• Chinese gold prices rose modestly in July 
• Au(T+D)’s trading volume in July extended its June surge
• The local gold premium saw a much lower volatility 
• Imports registered another decline, dropping to 55t in July
• Gold withdrawals from Shanghai Gold Exchange (SGE) experienced the first rise in four months 
• The People’s Bank of China (PBoC) added another 10t to its gold reserves

Many investors buy gold instinctively, as a long-term store of value. Charlie Morris, Head of Multi-Asset at UK investment manager Atlantic House Fund Management, has devised a more conventional way of assessing gold – using a tried and tested model. 

Gold was higher by 4% last week (XAU +3.9%, LBMA +3.9%), as US/China trade negotiations hit a snag, the US dollar fell, and rates continued to fall. Gold prices are at all-time highs in over 20 countries, having rallied 8% in the past month and 17% this year in US dollars.

On Friday 2nd August, the Blueprint for Gold Spot Exchange in India was released at the India International Gold Convention (IIGC) in Amritsar. The report was produced by the industry steering committee, which is comprised of 27 major stakeholders of the bullion industry – both global and domestic and is chaired by the World Gold Council.

The inhabitants of the UK are surrounded. There’s no escape. Brexit is everywhere you turn. News broadcasts, front pages, dinner conversations, everywhere.  Over three years (and counting) since the result, Brexit uncertainty remains a persistent part of the UK way of life and at the forefront of investors’ minds. 

The definitive market source for gold demand data, our latest Gold Demand Trends report explains in detail the 8% rise in global demand in Q2.

Listen back to our lively and informative discussion of the key trends shaping gold demand in the second quarter...

Looking ahead we expect two macroeconomic trends to play a key role; financial market uncertainty and accommodative monetary policy will likely support gold investment demand.

Multiple drivers propelled gold investment in the first half of 2019. We expect this trend to continue in the second half of the year.

Madame Wu Xiaoling, Chairwoman of the Board of the PBC School of Finance, Tsinghua University and former Deputy Governor of the People’s Bank of China, believes that gold has a crucial role to play in China’s continuing development and the internationalisation of the RMB. 

Recycled gold is an important source of gold supply . In 2018, the volume of recycled gold reached 1,168t, accounting for over 25% of total supply globally. Recycled gold is also an important source of supply in China, amounting to 146t, or 20% of domestic supply in 2018. Recently, China’s recycled gold market has experienced some exciting developments which could improve the efficiency and transparency of the industry. 

Summary

• Indian gold imports were 62t in June 2019 – up slightly on the same month last year 
• The domestic gold price was 6.1% higher in June as compared to end of May
• With higher domestic gold prices, the local discount in the gold market reached $23/oz (1.6% to the international price) by end of June
• Higher and relatively volatile prices encouraged gold futures trading on MCX: volumes touched a high of 28.2t in June 

Intro: Central banks bought more gold in 2018 than at any time since the early 1970s – and the trend has continued this year. Isabelle Strauss-Kahn, Member of the Advisory Board of the World Gold Council, former Director of Market Operations at the Banque de France and former Lead Financial Officer at the World Bank, explains why.

Our Central Banks and Public Policy team have just published the results of the 2019 Central Bank Gold Reserves Survey. The survey gives a fascinating insight into the minds of central bankers and is especially timely since central banks continue to post record-breaking levs of net gold purchases in recent quarters.

For Australian precious metals investors 21 June was a momentous day, with the price of gold topping A$2000 per ounce for the first time ever. 

 Week ending 12 July 2019