At the 2021 Boao Forum for Chinese Entrepreneurs International Gold Market Annual Summit held on December 3, Shi Jiyang, a senior expert of the Expert Committee of China Development Bank, said that the total annual supply of global gold in the past five years is about 4,700 tons. Gold is 3,700 tons. The total annual demand for gold in the past five years is about 4,300 tons. In addition, the demand for gold reserves and gold ETFs of central banks in various countries is increasing.
According to Shi Jiyang, the rise of gold prices to historical highs in 2020 is related to the monetary, financial, and commercial nature of gold. After the epidemic, the price of gold is highly negatively correlated with the actual yield of U.S. Treasury bonds and negatively correlated with the U.S. dollar index. In the long run, the price of gold has a strong relationship with the supply of U.S. dollars.
“Global monetary easing and the weakening of the dollar provide support for gold prices.” Shi Jiyang said that in recent years, gold reserves have been substantially increased, the process of de-dollarization has accelerated, and global asset allocation is facing reconstruction. “Gold, as a natural currency, still has long-term investment. Value, the price of gold may fluctuate in the short-term, but there is room for growth in the long-term. The price of gold will be at $1,600 per ounce in the next five years, and it may fluctuate up and down along with changes in the international situation.”
Shi Jiyang said that at present, the global economic uncertainty is increasing, the loose monetary policy continues, and the central banks of many countries increase their gold holdings. In the future, as the global landscape changes, central banks of various countries are expected to increase a basket of currencies and gold reserves, differentiate their asset portfolios, and value gold. Increasingly prominent.
“China‘s insurance, funds, and securities professional investment institutions actively participate in investment in the global gold industry chain to enhance the ability of Chinese investors to deal with international financial risks.” Shi Jiyang said.
At the summit, the “ESG Proposal for the Gold Industry” was officially released. The upstream and downstream companies in the gold industry jointly proposed to carry out a full range of ecological and environmental protection in the whole process of gold mining and smelting, and improve the source prevention system with the theme of the environmental impact assessment system. Promote environmental governance and ecological restoration, and build a gold industry that is in harmony with nature. At the same time, establish a green and low-carbon recycling development system, and strengthen green and low-carbon technological innovation and application of results.
According to Wang Lixin, CEO of the World Gold Council China, the gold industry continues to devote itself to the development and improvement of its environmental, social and governance (ESG) effectiveness. For example, all World Gold Council member companies and several other major gold mining companies have adopted “responsible Principles of Gold Mining”.
According to a report released by the World Gold Council recently, in 2020, the member companies of the World Gold Council contributed US$37.9 billion to the GDP of their country through taxation, salary and payment to local suppliers. This value is a percentage of their total gold sales revenue. 63%, which means that every ounce of gold produced can contribute close to US$1,100 in appreciation for the local area. Among them, the four Chinese member companies of the World Gold Council will directly contribute USD 480 million in domestic tax revenue and USD 680 million indirectly in 2020.