Gold outperforms most asset classes
Gold has outperformed all other major asset classes in 2020, and the 2021 outlook for gold “remains bright” according to ETF Securities (ETFS).
Kanish Chugh, ETFS head of distribution, said: “The combination of high level of uncertainty surrounding the COVID-19 pandemic and the ultra-low interest rate environment led to investors flocking to invest in gold, making it as a strong candidate as both a safe haven and a solid investment opportunity”.
Jaspar Crawley, World Gold Council head of distribution APAC, said a focus on yields, strong exchange traded fund (ETF) flows, economic growth and gold mining were the four trends which would keep gold attractive in 2021.
“With positive news about COVID-19 vaccines coming in now from three different sources, we see real yields becoming a bit more positive,” Crawley said.
“Gold has had a correction recently but, in the medium to long term, it will continue to remain well supported on the back of high fiscal deficits, low or negative interest rates, low or negative real yields and a weaker dollar.
“Volatility and expectations of weaker economic growth may result in softer consumer demand in the near term across regions, while economic growth rebounding in countries like China will support the long-term demand.”
In 2012, the World Gold Council, working with its members, developed The World Gold Council Conflict-Free Gold Standard, a common approach by which gold producers could assess and provide assurance that their gold has been extracted in a manner that does not cause, support or benefit unlawful armed conflict or contribute to serious human rights abuses or breaches of international humanitarian law.
Crawley said experts had talked about the concept of ‘peak gold’ – when the most had been mined in any one year – which some had believed we had already reached.
“Gold mine production totalled 3,531 tonnes in 2019, 1% lower than in 2018, according to the World Gold Council – this is the first annual decline in production since 2008,” Crawley said.
AUTHOR
Chris Dastoor
Recommended for you
The merger with L1 Capital will “inject new life” into Platinum, Morningstar believes, but is unlikely to boost Platinum’s declining funds under management.
More than half of the top 20 most popular shares bought by advised investors during the first half of 2025 were ETFs, according to AUSIEX data.
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.
