Quarterly Trends Report

Q3 2020: Gold’s safe-haven status set in stone

  • Multi Asset
  • Materials
  • Europe

In times of economic uncertainty, gold’s status as a safe-haven asset attracts investors and institutions looking to protect their wealth. With the world’s markets thrown into chaos by the coronavirus outbreak, the price per ounce shot up to over USD 2,000 in August – about double its value five years ago and up by 34% from the beginning of the year. As at October, gold is hovering at about USD 1,900/ounce. The impact these price movements could have on demand- and supply-side dynamics is a topic that Third Bridge Forum has explored during Interviews with specialists working in this industry.

How gold’s value is assessed differs from other metals, and not just because of its safe-haven status. “If you think about copper or iron ore, you can complete some level of fundamental analysis. What’s the expected demand globally? What’s the forecasted supply coming out of mines and maybe even recycling?”, explained a former senior executive from Newmont. However, gold’s price can experience short-term fluctuations driven by investors and institutions, and, added to this, “because gold does not degrade with time, most of the six billion ounces that have been mined over the last 7,000 years are still with us and in the form of jewellery, bars and coins.”

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