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 The latest edition of Gold Investment Digest offering investment professionals a concise analysis of recent gold market trends. Covering market and investment trends and key economic indicators, the Digest provides a single, straightforward summary of the gold market and the key factors that influence it.
Price trends
The gold price ended the third quarter at US$995.75/oz on the London PM fi x, having breached the symbolic US$1000/oz level during the penultimate week of the quarter, and up from US$934.50/oz at the end of Q2 2009. The rally continued in early Q4 2009, with the gold price posting successive new records in the second and third weeks of the quarter. The latest record of US$1059.50/oz, on the London PM fi x, was set on 14 October 2009.
… read more on page 2
Investment trends
Gold exchange traded funds continued to grow in popularity during the third quarter, reaching yet another record in tonnage terms. Net long non-commercial and non-reportable positions on COMEX, a proxy for investor flows, rose to an all-time high of 27.58 million ounces at the end of September. GFMS report a strong pick up in buy-side activity in the OTC markets during September, after the usual summer lull, although not to the same extent as in the futures market.
… read more on page 4
Market and economic influences
The combination of the strengthening global recovery and an unchanged policy stance by the world’s major central banks heightened fears about future infl ation and increased demand for gold as a store of value. The improvement in risk appetite also put more downward pressure on the dollar, as investors sold US Treasuries in favor of higher yielding assets overseas, increasing demand for gold as a dollar hedge. The dollar’s woes were exacerbated by a UK newspaper report claiming that a number of countries were planning to stop using the dollar for oil trading in favor of a basket of currencies, including gold. Although the report was subsequently denied by various central bank and finance ministry offi cials, it re-focused investor attention on the dollar’s role in the global trading and reserve system.
… read more on page 6
Gold market trends
Preliminary reports on third quarter trends in India suggest that jewellery demand remained weak, although the upcoming wedding and festival season has resulted in some seasonal improvement. Reports from China continue to be more upbeat, while the US market is still being dominated by the cutbacks in discretionary purchases that have accompanied the economic downturn. Separately, the European Central Bank announced a third Central Bank Gold Agreement, lowering the annual sales ceiling to 400 tonnes from 500 tonnes. The bank said the agreement could also accommodate the planned IMF sales, if necessary.
… read more on page 8
Key data
Our key data table provides you with a concise summary of gold returns, supply and demand statistics, price volatility and
Download Gold Investment Digest, October 2009
PDF format, 1.1MB.
World Gold Council
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Founded in 1987, the World Gold Council is an organisation formed and funded by the world's leading gold mining companies with the aim of stimulating and maximising the demand for, and holding of, gold by consumers, investors, industry, and the official sector.
As well as undertaking marketing initiatives to drive demand, the World Gold Council is also instrumental in working to lower regulatory barriers to the widespread ownership of gold products, helping to develop distribution systems and promoting the role of gold as a reserve asset in the official sector.
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