Gold Demand Trends Full Year 2021 World Gold Council

Unquestionably, longer-term price action remains biased to the upside, according to the weekly timeframe. We retain our fair value estimate for no-moat Newmont of USD 53 per share after updating our forecasts to incorporate the acquisition of Newcrest and the latter’s financials at end of September 2023. We do not assign an economic moat to the enlarged Newmont and reiterate our Medium Uncertainty Rating for the company.

1. Consequently, gold has historically underperformed in the months leading up to a Fed tightening cycle, only to significantly outperform in the months following the first rate hike (Chart 3).
2. Kinross will pay a USD 0.03 (roughly CAD 0.042) dividend in December, the same as last year and in line with its quarterly dividend policy.
3. “The second factor impacting the price of gold is expected long-term real interest rates,” says Azoury.
4. But it could also backfire for markets and test the resolve of the Fed, who’s belief is that bringing demand back into balance with supply is necessary to combat inflation.
5. WGC assumes no responsibility for updating any forward-looking statements.

In addition, several central banks have added to their gold reserves lately, reflecting concerns about the long-term global economy. The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate. “The longer-term price outlook is positive for gold,” said independent analyst Ross Norman, adding that gains will be deferred as markets try to get a handle on likely U.S. rate cuts and the possible trajectory of the dollar and gold. On Nov. 29, Fed Governor Christopher Waller said he envisioned easing policy if inflation data continues to improve over the next three to five months, prompting analysts to forecast a spike in gold prices.

Week ahead – ECB and BoJ meetings in the spotlight

The creation of a gold coin stamped with a seal seemed to be the answer, as gold jewelry was already widely accepted and recognized throughout various corners around the Earth. Just one quarter into fiscal 2024, the federal government has already run a budget deficit of over half a trillion dollars…. But there are also ninja price increases out there that you might not notice. Not only does gold have value, but that value changes with time — which is why investors often look to the commodity as a way to grow or stabilize their portfolios. Investors await the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, due on Friday to gauge the Fed’s interest-rate path.

After a strong start to Q1 in China, demand came to a virtual halt in March. Tough new lockdowns imposed to contain a resurgence of COVID-19 had a marked impact on demand for jewellery, bars and coins. Gold ETFs had their strongest quarterly inflows since Q3 2020, fuelled by safe-haven demand. Holdings jumped by 269t, more than reversing the 174t annual net outflow from 2021.

Gold spot price

“Spot gold prices have risen recently to around USD 2,040 per ounce on rising expectations that the world’s central banks, led by the Federal Reserve, are close to ending interest rate increases. We retain our fair value estimate for no-moat Agnico Eagle of USD 53 per share, with shares trading at an 11% discount to fair value. We think this is likely due to concerns over rising real interest rates, which are a headwind for gold prices. We forecast production to rise to about 3.5 to 3.6 million ounces over our five-year forecast period, driven by incrementally higher production at most of its mines. Agnico’s average unit costs place it comfortably within the second quartile of the industry cost curve, lower cost than larger competitors no-moat Newmont and no-moat Barrick Gold. We also think it is exposed to lower sovereign risk than its larger rivals.

It’s important to understand the broader trajectory of the economy as we consider where gold… New Jersey Governor Phil Murphy has unilaterally killed a bill that would have exempted the sales tax on purchases https://broker-review.org/ of gold and silver…. A coalition of lawmakers in Honolulu have reintroduced legislation last considered in 2021 to end the sales tax on purchases of gold and silver coins, bars, and rounds….

Gold News

Bar and coin demand exceeded previous annual levels in both the US and Germany as investors focused on rising inflationary pressures and low/negative real rates. Finally, while there’s a lot of emphasis on the relationship with US interest rates, gold is a global market. Prices of the yellow metal have risen for two consecutive months with the Israel-Hamas conflict questrade review boosting demand for the safe haven asset, while expectations for interest rate cuts have provided further support. Gold tends to perform well during periods of economic and geopolitical uncertainty due to its status as a reliable store of value. Alternatively, looking at standardised (z-score) positioning increases the number of observations (Chart 3).

This was the strongest first quarter for gold recycling activity for six years. This information does not take into account any investment objectives, financial situation or particular needs of any particular person. Reproduction or redistribution of any of this information is expressly prohibited without the prior written consent of World Gold Council or the appropriate copyright owners, except as specifically provided below. Information and statistics are copyright © and/or other intellectual property of the World Gold Council or its affiliates (collectively, “WGC”) or third-party providers identified herein. Dot-plot projections suggest that year-ahead Fed expectations have significantly exceeded actual target rates (Chart 2).

ETF outflows were the only exception to robust gold demand recovery in 2021

Gold stocks are typically more appealing to growth investors than to income investors. Gold stocks generally rise and fall with the price of gold, but there are well-managed mining companies that are profitable even when the price of gold is down. Increases in the price of gold are often magnified in gold stock prices. A relatively small increase in the price of gold can lead to significant gains in the best gold stocks, and owners of gold stocks typically obtain a much higher return on investment (ROI) than owners of physical gold. Even though gold no longer backs the U.S. dollar (or other worldwide currencies, for that matter), it still carries importance in today’s society.

Which Countries Have the Most Gold?

Historically, gold has served as a hedge against both of these scenarios. When investors realize that their money is losing value, they will start positioning their investments in a hard asset that has traditionally maintained its value. The 1970s present a prime example of rising gold prices in the midst of rising inflation.

The Ukraine invasion and surging inflation were key factors driving both the gold price and demand. This information may contain forward-looking statements, such as statements which use the words “believes”, “expects”, “may”, or “suggests”, or similar terminology, which are based on current expectations and are subject to change. Forward-looking statements involve a number of risks and uncertainties. There can be no assurance that any forward-looking statements will be achieved.

On Friday, while Fed Chairman Jerome Powell pushed back on expectations for aggressive interest rate cuts ahead, his remarks indicated the central bank may at least be done hiking for now. Gold prices are on course to hit fresh highs next year and could remain above $2,000 levels, analysts said, citing geopolitical uncertainty, a likely weaker U.S. dollar and possible interest rate cuts. To ascertain the investment merits of gold, let’s check its performance against that of the S&P 500 Index for the past year (January 2022 to January 2023), an example of a time when gold outperformed compared with the S&P 500. Gold was up around 3.5% over this period, while the S&P 500 fell more than 16%.

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Unlike smaller competitors Agnico Eagle and Kinross Gold, Newmont’s sales for the first nine months of 2023 have disappointed, diluting margins, but we think sales will increase and margins improve. “The anticipated retreat in both the USD and interest rates across 2024 are key positive drivers for gold,” Heng Koon How, head of markets strategy, global economics and markets research at UOB, told CNBC via email. He estimated that gold prices could reach up to $2,200 an ounce by the end of 2024. Unsurprisingly, recent data has underpinned the buck and US bond yields, as well as weighed on the price of gold. No-moat Agnico Eagle’s 2023 third-quarter result met our expectations.

With Bitcoin making the news last week when the Securities and Exchange Commission (SEC) finally approved exchange traded funds, it’s a good time to review the topic again. Representatives in Vermont realize that their state has become a big outlier, and that it’s high time for the state to end their practice of taxing purchases of gold and silver. So, when the market and economic conditions are concerning and investors are seeking safety, they tend to flock to gold — causing its price to climb.