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  Jim Kingsland

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  18 October 2012

  The World Gold Council has released its 3rd quarter gold report. There is a treasure trove of information. The full report is linked below.

  Quarterly statistics commentary Q3 2012

  Overview

  This commentary summarises gold’s price performance in various currencies, its volatility statistics and correlation to other assets, and the macroeconomic factors that influenced gold’s behaviour during the quarter. It provides macroeconomic context to the investment statistics published at the end of each quarter and highlights emerging themes relevant to gold’s future development. In this issue, we explore the influences that unconventional monetary policy has on financial markets. In particular, we discuss the effect of central bank policy actions on gold.

  Q3 2012 in summary
  •Gold (US$/oz) returned 11.1% in the third quarter as investors responded to further central bank measures aimed at stimulating the economy. Volatility decreased during the period, with gold prices experiencing little movement in the first half of the quarter; correlations to other assets, generally low, remained similar to those seen in Q2.
  •Central banks announced a continuation of their unconventional monetary policy programmes in Q3.
  •Central banks have numerous rationales for undertaking unconventional monetary policy, including lowering borrowing costs and supporting financial markets.
  •Financial assets have responded to central bank policy announcements, but gold’s reaction has been the strongest.
  •There is a consensus that these policies drive investment into gold purely due to inflation-risk impact. We believe that there is not one but four principal factors that provide further support to the investment case for gold:

  - Inflation risk
  - Medium-term tail-risk from imbalances
  - Currency debasement and uncertainty
  - Low real rates and emerging market real rate differentials

  MORE… from the WGC.

  Worth Reading:

  First-Time Treasure Hunter Discovers Trove of Roman-Era Gold Coins http://abcn.ws/T2CT4W

  Good going Central Banks! Central banks have created $9 trillion during the crisis, equivalent to the value of all the gold ever mined http://econ.st/RCKwyX

  Three Scenarios For Gold http://www.zerohedge.com/news/2012-10-17/three-scenarios-gold …

  Is the price of silver about to surge? I don’t know, but othersthink it’s about happen: http://www.livetradingnews.com/the-silver-price-to-surge-90235.htm#.UH_9XYhN3Pk.twitter

  I will note that lots of silver has been moving out of Brinks in recent weeks, by the tonne.

  So Far So Good On The Road To $50 #Silver – Forbes http://onforb.es/U5UKd6

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