Monthly report (T8 Gold) – December 2024
Reporting — January 2025
Monthly fund update
Key points
- A shift in monetary policy expectations (slower pace of rate cuts) resulted in a sharp increase in bond yields, which saw gold remain under pressure.
- A broad-based selloff in global equities combined with the weaker gold price resulted in gold miners pulling back for the second consecutive month.
- Gold mining stocks remain extremely attractive with valuations at what we believe is at 25-year lows. We see the dislocation as a significant opportunity which markets haven’t yet recognised.
- Inflows to gold bullion-backed ETFs resumed in December, with last month marking their first month of net outflows since April 2024.
- The trend of elevated central bank gold buying is continuing with China reporting gold purchases for the second consecutive month in December. China was the largest purchaser of gold among central banks during the first quarter of this year (until it announced a pause to purchasing in April) and was the top buyer in 2023.
- We believe the higher and higher prices at which central banks have been purchasing gold, has the potential to create a floor under the gold price, or a dynamic akin to a ‘central bank put’.