Gold Loses Its Shine

| Multi Asset

The pandemic was a game changer for gold as it pushed uncertainty to extreme highs, leading to strong investor demand and a temporary constraint over supplies. Gold futures trading on COMEX faced delivery shortages of 100 oz bars, which pushed the premium between the futures and physical London spot gold prices to record highs. This prompted the exchange to launch a new contract where 400 oz bars could be delivered in an attempt to alleviate the physical supply bottlenecks and shortage fears.

However, according to the World Gold Council, demand hit an 11-year low later in 2020 and the last quarter of the year was the weakest for demand since 2008. The rally in gold was therefore largely driven by its safe haven status due to Covid-19 uncertainty.


Gold Loses Its Shine

Source: Unigestion, Bloomberg, as of 31 May 2021

Important Information

The information and data presented in this page may discuss general market activity or industry trends but is not intended to be relied upon as a forecast, research or investment advice. It is not a financial promotion and represents no offer, solicitation or recommendation of any kind, to invest in the strategies or in the investment vehicles it refers to. Some of the investment strategies described or alluded to herein may be construed as high risk and not readily realisable investments, which may experience substantial and sudden losses including total loss of investment.

The investment views, economic and market opinions or analysis expressed in this page present Unigestion’s judgement as at the date of publication without regard to the date on which you may access the information. There is no guarantee that these views and opinions expressed will be correct nor do they purport to be a complete description of the securities, markets and developments referred to in it. All information provided here is subject to change without notice. To the extent that this page contains statements about the future, such statements are forward-looking and subject to a number of risks and uncertainties, including, but not limited to, the impact of competitive products, market acceptance risks and other risks.

Data and graphical information herein are for information only and may have been derived from third party sources. Although we believe that the information obtained from public and third party sources to be reliable, we have not independently verified it and we therefore cannot guarantee its accuracy or completeness. As a result, no representation or warranty, expressed or implied, is or will be made by Unigestion in this respect and no responsibility or liability is or will be accepted. Unless otherwise stated, source is Unigestion.

Past performance is not a guide to future performance. All investments contain risks, including total loss for the investor.