The strategic case for gold amsterdam 11 october 2009
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The strategic case for gold amsterdam 11 october 2009

The Strategic Case for GoldAmsterdam11 October 2009


Disclaimer
Disclaimer

The information and opinions contained in this presentation have been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. This presentation does not purport to make any recommendation or provide investment advice to the effect that any gold related transaction is appropriate for all investment objectives, financial situations or particular needs. Prior to making any investment decisions investors should seek advice from their advisers on whether any part of this presentation is appropriate to their specific circumstances. This presentation is not, and should not be construed as, an offer or solicitation to buy or sell gold or any gold related products. Expressions of opinion are those of the World Gold Council only and are subject to change without notice.


Introducing world gold council
Introducing World Gold Council

MEMBERS

Agnico Eagle

AngloGold Ashanti

Barrick Gold Corporation

Coeur d’Alene Mines Corporation

Compania de Minas Buenaventura

Eldorado Gold

Goldcorp

Gold Fields Limited

Harmony

IAM Gold

Kinross Gold Corporation

Newmont Mining Corporation

Peter Hambro Mining

Yamana Gold

ASSOCIATES

Cedimin

China National Gold Corporation

The Hutti Gold Mines Company

Kahama Mining

Minera Yanacocha S.R.L.

Mitsubishi Materials Corporation

Royal Gold Inc.

  • Funded by the world’s leading gold mining companies

  • We promote the use of gold in all its forms through marketing activities in major international markets.

  • Offices in key consuming countries:

    • India

    • China

    • Middle East

    • United States


Outline
Outline

  • Demand and supply fundamentals – resilient demand and constrained supply

  • The outlook

  • Key investment attributes

    • A hedge against inflation

    • A hedge against dollar movements

    • A safe haven and insurance policy

    • A diversifier













Why gold a safe haven and form of insurance
Why gold? A safe haven and form of insurance

  • A simple asset

  • No default risk

  • No counterparty risk

  • Liquid

  • Gold’s history

    • As a means of exchange

    • As the centre of the global monetary system


Gold is a hedge against inflation uncertainty
Gold is a hedge against inflation uncertainty

  • Inflation or deflation?

  • Gold is a long run hedge against inflation

  • Yet, a period of deflation suggests ongoing economic uncertainty, so safe haven flows would remain underpinned

  • Medium to longer term, inflation is a significant risk



Gold is a diversifier
Gold is a diversifier

Redtext denotes that correlation coefficient is not significantly different from zero.

Violet text denotes that correlation coefficient is negative (5% level of significance).





Over and above a commodity basket
Over and above a commodity basket

Optimal Portfolios Composition Map

volatility

4.3%

4.3%

4.6%

4.9%

5.4%

6.0%

6.7%

7.3%

8.0%

8.8%

9.6%

10.5%

11.4%

0.0%

10.0%

20.0%

30.0%

40.0%

allocation

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

UK Gilts Short

UK Gilts Medium

UK Gilts Long

Global Bonds

UK Equities

Europe Ex UK Equities

North American Equities

Pacific Equities

Gold

Commodities


Summary
Summary

  • The demand for gold has shown considerable resilience across the economic cycle

  • The three sectors provide a source of balance

  • The outlook for supply remains constrained

  • High levels of uncertainty – economic, inflation, currency – are supportive for gold

  • Gold’s biggest strength is its diversification properties - the focus on diversification and risk management are expected to continue


Questions
Questions?

www.gold.orgwww.invest.gold.org


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