“We have seen that the Shanghai Gold Exchange would list gold contracts in Hong Kong, further opening the Chinese gold market (with China both the largest consumer and producer of the precious metal) to the world” said, Jordan Eliseo, GM- ABC Bullion Australia in the Market Commentary; Gold holds key support in record year for precious metals!
Excellent analysis on the case for gold in a portfolio from Alex Shahidi, Managing Partner and Co-CIO at Evoke Advisors. In a Forbes article, Shahidi touched on the case for gold in a portfolio, noting that; “Gold’s impressive performance in recent years has captured headlines, but its true story stretches much further back.
Since 1971, when the U.S. came off the gold standard, the precious metal has delivered strong, competitive returns, nearly matching global equities over the long term, with annualized returns of 8.4% compared to 9.2% for global stocks.” Shahidi.
He also noted that not only has gold outperformed equities in the last twenty-five years, as well as its qualities as an inflation hedge, portfolio diversifier, safe haven and source of liquidity, with a summary of his views on gold noting that; “While not a conventional holding for all investors, gold’s unique attributes and proven track record make it worth considering as part of a well-diversified investment portfolio.”
OMFIF also released a report on central bank gold demand, which noted that the precious metal is finding more favour relative to the US dollar amongst reserve asset managers. Specifically, their report noted that; “Gold is shining brightest as a diversifier.
A dedicated ‘in-focus’ section reveals the precious metal is the most demanded asset class for central banks, with 32% of central banks expecting to increase their holdings in the short term”. These findings very much align with recent World Gold Council surveys on the intentions of central banks as it relates to the gold market.
Aberdeen wrote an interesting piece on gold, even if their price outlook wasn’t necessarily bullish relative to current levels. In particular they noted that; “Central banks are buying to diversify their foreign exchange reserves away from US dollars and treasuries, which can become illiquid in the event of tariffs or sanctions, and instead purchase more gold.
ETF investors have been selling gold based on the historical relationship between real yields and gold prices. Since real yields have been rising, these investors have expected gold prices to fall. Now that real yields are falling, ETF investors have started to buy more gold. Central banks have continued to buy, with 2024 marking the third consecutive year they purchased more than 1,000 tons.
Having expected gold to reach $2,800 by the year-end of 2024 and $3,000 in the first half of 2025, we now see the potential for gold prices to reach $3,300 by the year-end of 2025.”
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