Is Gold Golden?
Or Is The Luster
Gone?
Dave Nadig, Moderator
Director of Research
Index Universe
Jim Ross, Panelist
President & Senior MD
State Street Global Advisors
Philip Klapwijk, Panelist
Chairman
GFMS
Edward Vallar, Panelist
Director of Investments and Research
GM Advisory Group
Is Gold Golden?
Or Is The Luster
Gone?
Philip Klapwijk, Panelist
Chairman
GFMS
World Investment
Value of World Investment
Source: GFMS
Net Producer Hedgebook
(outstanding delta adjusted position)
Position at end-2009
around 250
tonnes, suggesting very
limited scope for further
de-hedging in future.
Source: GFMS
Jewellery Fabrication Demand
Jewellery Fabrication Index
Jewellery as % of Total Demand
Source: GFMS
Total Production Costs
nominal (money-of-the-day) terms
Total cash costs remained relatively stable in
2009, and averaged around $600 compared to
$240 in 2000. Assuming costs stay roughly the
same going forward, could this indicate the
approximate floor for the price?
Gold Price
Total Production
Costs
Source: GFMS
Is Gold Golden, Or Is The Luster
Gone
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Economic backdrop continues to favour investment demand.
“Weight of money” likely to drive prices higher still.
Gold increasingly ‘dependent’ on continued investor flows.
Jewellery demand being crushed by high prices and weak economy.
“Fundamental floor” moving further away.
If and when conditions favouring investment change a major
correction is on the cards for the gold price.
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Shiny, Shiny
Do Ratios Matter?
Do Ratios Matter?
The Currency Question
$1,400.00
1200
$1,200.00
1000
Gold (PM Fix)
$1,000.00
800
$800.00
600
$600.00
$400.00
$200.00
$0.00
400
200
0
Tonnes in Trust
The Rise of GLD
Cows Vs. Milk
Do Supply & Demand Matter?
Gold Surplus/Deficit
200
Tonnes
100
0
-100
-200
-300
Source: World Gold Council
Do Supply & Demand Matter?
Gold Demand (Share)
100%
ETFs
90%
80%
70%
Physical
Investment
60%
Other Ind.
50%
Dentistry
Electronics
40%
30%
Jewelry
20%
10%
0%
2005
2006
2007
Source: World Gold Council, HardAssetsInvestor
2008
2009 (Est)
Is Gold Golden?
Or Is The Luster
Gone?
Dave Nadig, Moderator
Director of Research
Index Universe
Jim Ross, Panelist
President & Senior MD
State Street Global Advisors
Philip Klapwijk, Panelist
Chairman
GFMS
Edward Vallar, Panelist
Director of Investments and Research
GM Advisory Group