When investing in a Gold ETC your capital is at risk.
- Gold finished the year up 23.6% in USD, 19.4% in GBP and 12.3% in EUR[1]
- Gold
held in London vaults increased for the seventh consecutive month to a new
record of 9,452 tonnes in November[2]
- Investors
look to monetary and fiscal policy as potential major factors for the gold
price in 2021
Performance Review
Monthly Performance of Fund/Sector
- The London Bullion Market Association (LBMA) PM gold price ranged between
$1,810.75 per troy ounce on 1st December and $1,887.60 on 30th
December
- The Royal Mint Physical Gold ETC Securities, our Gold ETC, closed the year with an AuM of
just under $389million
Gold Performance
Current performance is no guarantee of future performance.
Source:
LBMA / HANetf
December figures based on 01.12.20 – 30.12.20
What
Has Driven This Performance?
With the news of the
coronavirus vaccine, the outcome of the US election and a resolution to the
UK-EU trade negotiations all behind us, gold still managed to climb throughout
December despite the reduced sense of uncertainty.
The global pandemic saw
a surge in demand for US Treasuries, but as a sense of optimism returns to the
equity markets, investors have increasingly been looking for stocks and shares
to make up a larger part of their portfolios. The US Dollar has also been hit
by the comparative pace of the apparent recovery of the Asian economies versus
the US. Additionally, recent statements from the US Federal Reserve have also
implied that yields on US Treasuries will remain low until certain criteria are
met. The combination of these three factors has hit demand for USD, causing it
to weaken, which has resulted in a higher gold price.
Mid-month gains were
precipitated by bipartisan consensus in the US that an agreement on the long-anticipated
coronavirus fiscal stimulus package was imminent. The prospect of additional
government spending undermined the USD and boosted gold.
However, it was not just
in USD that the price rose. The GBP gold price also followed a broadly upward
trajectory through December, rising 2.3% over the month. Brexit negotiations
impacted the value of the pound at various points throughout December as
speculation mounted about the shape (and possibility) of a trade deal between
the UK and the EU, leading to a slightly more volatile GBP gold price.
London
Bullion Market Association (LBMA) PM Gold Price (01.12.20 – 31.12.20)
Total
Return NAV to Date (31/12/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
The Royal Mint Physical Gold ETC Securities
|
-6.36%
|
-10.00%
|
1.85%
|
11.26%
|
-
|
11.26%
|
London 3pm LBMA Gold
|
-6.34%
|
-9.95%
|
1.96%
|
16.36%
|
20.71%
|
11.46%
|
London
Bullion Market Association (LBMA) PM Gold Price (01.12.20 – 31.12.20)

Past performance is not an indicator
for future results and should not be the sole factor of consideration when
selecting a product. Investors should read the prospectus of the Issuer
(“Prospectus”) before investing and should refer to the section of the
Prospectus entitled ‘Risk Factors’ for further details of risks associated with
an investment in this product. Source: LBMA / HANetf, data as of 04/01/21. Note
that there was in addition to there being no LBMA PM gold fix on UK bank
holidays, there was also no LBMA PM gold fix on 24/12/20 and 31/12/20
Industry News
The Original
Christmas Gift – Still Popular 2,020 Years Later
Over the Christmas period (1st November – 31st
December 2020) The Royal Mint saw a surge interest in gold products from its
website. The number of customers buying gold bullion was up 463% compared to
the same period in 2019 [3]. Small 1g and 5g Christmas gold bars were a
hit with gifters with The Royal Mint selling 53% more than the previous year,
but standard gold bars, and Sovereign and Britannia coins also proved popular.
However, while the appeal of gold has endured, gold-gifting has changed
with The Royal Mint also offering a more 21st century approach.
Private investors not intending to take immediate physical delivery of gold can
gain exposure to the gold price though their ISAs, SIPPs and GIAs via the Gold ETC
or can opt to buy ‘pool-allocated’ gold via The Royal Mint’s DigiGold and Little
Treasures propositions. Investors in The Royal Mint’s Physical Gold ETC are also
able to redeem their certificates for physical gold coins or bars at any point.
Outlook
Despite some major geopolitical issues being settled or becoming clearer
in the final months of 2020 – the US elections, the Brexit trade deal, the
coronavirus vaccine – the gold price ended the year 23.6% higher than the first
LBMA PM fix of 2020 (2nd January, $1,527.10). In GBP terms gold
finished the year 19.4% higher, and priced in EUR the figure was 12.3%.
Though many are anticipating a Biden-administration to ease
geopolitical tensions between the US and China, issues persist between
oil-producing nations, and within and between some Middle Eastern states. These
could aid gold ascent higher should they escalate. However monetary and fiscal
responses to the coronavirus pandemic could be the main drivers of the gold
price in 2021. As governments grapple with rising unemployment and company
liquidations, and seek to introduce reflationary measures, gold’s traditional function
as a hedge asset and store of value might appeal to investors.
A rebound in jewellery demand in Asia (and particularly in the
largest markets of China and India) after uncertainty and lockdown restrictions
hampered buying, as well as increased central bank purchases in 2021 – both
slowed in 2020 due to rising price of gold – could help support demand, and
thus prices, further.
Product Details
The
Royal Mint Physical Gold ETC Securities (RMAU) is designed to offer investors
an effective way to access the gold market as it tracks the spot price of
physical gold.
It
is the first financial product to be sponsored by The Royal Mint and the first
gold ETC custodied with a European Sovereign Mint.
The
ETC is backed by London Bullion Market Association (LBMA) Good Delivery bars
held on a segregated basis. The gold
will be stored and guarded in The Royal Mint's highly secure vault in
Llantrisant, Cardiff.
The
value of your investment may go down as well as up and past performance is no
indication of future performance. Your capital is at risk.
Exchange |
Bloomberg CODE |
RIC |
ISIN |
SEDOL |
Currency |
TER |
London Stock Exchange |
RMAU LN |
RMAU.L |
XS2115336336 |
BKT7175 |
USD |
0.22% |
London Stock Exchange |
RMAP LN |
RMAP.L |
XS2115336336 |
BKT7197 |
GBP |
0.22% |
Deutsche Boerse Xetra |
RM8U GY |
RM8U DE |
XS2115336336 |
BKT71G4 |
EUR |
0.22% |
Borsa Italiana |
RMAU IM |
RMAU.MI |
XS2115336336 |
BKT71B9 |
EUR |
0.22% |