【正文】 z)20 Gold Market Fundamentals: Strong Demand ? Total gold demand in H1 2021 increased by 21% ? Jewellery demand at record high: $38bn for year to June 2021, +17% in H1 2021: – India (~20% total demand) saw highest ever quarterly demand in Q2’05, increasing 42% yoy in tonnage terms. – China saw jewellery demand grow by 11% in Q2’05. Now 3% of global market – still a long way to go!!! ? Investment demand up 66% for H1 2021 Source: World Gold Council, GFMS, Bloomberg. All percentages show growth in tonnage terms Jewellery demand 19802021, tonnes and US$ Str e e tT R A C K S G o l d T r u s t s h a r e s i n th e m a r k e t0 . 01 0 . 02 0 . 03 0 . 04 0 . 05 0 . 06 0 . 07 0 . 0N o v 0 4 D e c 0 4 Ja n 0 5 F e b 0 5 M a r 0 5 A p r 0 5 M a y 0 5 Ju n 0 5 Ju l 0 5No. of shares (million)21 Gold Market Fundamentals Limited Supply ? Production declined by 4% in 2021 largest annual decline since the 1940s ? Central Bank sales down 19% in 2021 ? Total supply down 13% in 2021 Strong market fundamentals supportive of a higher gold price Source: AngloGold Ashanti, World Gold Council, MLIM R e s o u r c e R e p l a c e m e n t01020304050607080901 9 9 5 1 9 9 8 1 9 9 9 2 0 0 4Million Ounces per annumP r o d u c t i o n r a t e D i s c o v e r y r a t e? Since 1998, exploration budgets of gold mining panies cut by 76% ? Discoveries at alltime low ? Less than 30% conversion of discovered ounces to production The Cycle 23 The Commodity Cycle Market wrestling with the question: Is this the peak of a normal cycle or the early stages of a supercycle? ? The argument for a supercycle: – DEMAND – the China effect (and don’t fet India) – SUPPLY – lack of investment in the previous decade and long lead times limits supplyside reaction – Consolidation of the industry ? To a greater or lesser extent the same patterns can be found in all modities 24 Chinese economy remains buoyant Ch in e s e Q u a r t e r ly G DP G r o w t h y o y66 . 577 . 588 . 599 . 5101 0 . 511Q1 97Q3 97Q1 98Q3 98Q1 99Q3 99Q1 00Q3 00Q1 01Q3 01Q1 02Q3 02Q1 03Q3 03Q1 04Q3 04Q1 05%? GDP growth in Q2 2021 of % ? Industrial production growth in August 2021 of % ? Fixed Asset Investment growth in August 2021 of % Source: National Bureau of Statistics of China 25 Urbanisation of China fuels construction growth ? Market fears of slowdown appear unfounded ? Shakeout of “speculative” developers earlier this year lead to lower growth ? Return of high growth rates in construction activity and steel consumption ? Chinese stainless steel consumption thought to grow at an average of 9% pa for next decade ? Not just in China – 2021 first year in history that more people live in cities than rural area Chinese Property Construction Index Chinese Steel Consumption Source: BHP Billiton, UBS, September 2021 26 Demand ? Industrialisation and urbanisation of China is having a huge effect on the modities mar