Insights

• Indian gold imports reached just 26.3t in September 2019 – 61% lower than the same month last year.
• The domestic gold price was 2.4% lower in September compared to August, but 18.7% higher y-t-d.
• With weak physical demand, the discount in the local gold market reached a peak of US$55/oz in September, but narrowed to US$29.5/oz by the end of the month.
• Monsoon levels in 2019 are the highest for 25 years; Kharif sowing almost flat y-o-y.

• The Shanghai Gold Benchmark price saw a modest decline in September, with the local gold premium falling sharply due to the stabilising currency and increasing gold imports.
• Led by the declining gold price and the soft physical demand, both Au(T+D) and Au9999’s trading volume dropped last month while loadouts from the Shanghai Gold Exchange (SGE) levelled off.
• After hitting the lowest level since 2017 in July, gold imports to China rebounded in August.
• The People’s Bank of China (PBoC) added another 6t to its gold reserves in September. After ten consecutive purchases, the PBoC now holds 1,948t gold in its reserves.

Today we have published our latest central bank data for August. As usual, I’ll be summarising the key highlights. But if you want to dig a little deeper, you can find our central bank data set here.

• The domestic gold price was 10.3% higher in August compared to July, outpacing the LBMA gold price which rose by 7%
• Indian gold imports reached just 28.2t in August 2019 – 70% lower than the same month last year and lowest level since January 2018
• With elevated domestic gold prices and a higher custom duty, the discount in the local gold market widened out as far as US$55/oz in August
• Monsoon rainfall is 5% above Long Period Average (LPA) with Kharif sowing just 0.2% lower than last year; normal monsoon and healthy sowing bodes well for rural gold demand in Q4 2019.

On 17 September, independent asset management firm First Eagle outlined the benefits that it believes gold and gold mining stocks can bring to an investment portfolio. Today, First Eagle discusses gold’s role in detail and assesses the current drivers for performance.

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. 

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...

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. 

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.

Having risen over 3% in May, the loco-China gold prices continued to soar in June. Au(T+D), the most liquid and margin-traded gold contract at Shanghai Gold Exchange, rose 8.71%, the best monthly performance in 3 years.

Akshaya Tritiya is one of the most auspicious occasions in Hindu religion. The word Akshaya means ‘Eternal’ and Akshaya Tritiya is thus considered an auspicious day for, among other things, starting a business, buying a property or making an investment. Buying gold on Akshaya Tritiya is believed to bring good fortune and prosperity. On the day itself, there is even a specific time period which is seen as auspicious for buying gold – the shubh muhurat.