Gold Investment Digest Q1 2011 from World Gold Council http://www.gold.org/
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| Source Barchart.com 6 month Gold chart |
Overview
Gold’s long-term supply and demand dynamics and several macro-economic factors ensured gold remained a sought-after asset in Q1 2011. Following a consolidation in January, gold ended the quarter on a firm footing, returning 2.4% over the period.
Price trends
The gold price rose by 2.4% during
Q1 2011 to US$1,439.00/oz by 31 March, on the London PM fix. However, gold’s volatility continued to diminish, a testament to its measured price appreciation. Gold prices rose to 28-year highs in yen terms by the end of the quarter, despite a temporary currency spike in March in the wake of Japan’s crises. In other countries, gold returns were more modest and even negative, as the US dollar lost ground against multiple currencies. Read more…
Investment trends
Investor activity in the gold market
during Q1 2011 differed by region.
ETFs in the US and the UK experienced net redemptions on the back of year-end rebalancing and some profit-taking, while continental European and Indian investors increased allocations. Recent data shows a resumption of net inflows in the latter half of March and early part of April. Coin and bar purchases remained high, while activity in the futures and OTC markets was buoyant. Read more…
Market and economic influences
Investor sentiment improved in the first part of Q1 2011. However, continued geopolitical unrest likely slowed the normalisation of economic growth and
also raised the potential for a significant slowdown. Inflation – especially from
food and energy prices – remains a real concern for consumers around the world. These two influences also focused investor attention on gold’s unique attributes and
its role as a store of value. Read more…
Gold market trends
Preliminary reports for Q1 2011 indicate healthy but mixed activity in the market, responding in part to changes in the gold price. Evidence suggests central banks continued their recent trend of limited sales and increasing purchases. In addition while mine production increased in 2010, recycling activity declined marginally as economic growth in emerging markets mitigated part of the effect of higher prices. Read more…
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