Gold, what is it good for?
Asian weddings and portfolio diversification
Some interesting developments in gold over the past year. If you’ve been holding it, congrats you have some green in your portfolio.
Quick read on ECB’s publications (link below), two things that stood out:
Number of gold futures contracts noticed for delivery has been historically high in 2025, January 2025 delivery notices being the highest since July 2007.
Prior to the US tariff announcement on 2 April this year, worries about gold being subject to sweeping import tariffs and higher prices on the futures exchange in New York than in the cash market in London reportedly led to gold held in London being shipped to New York. As a result, the costs of borrowing and sourcing gold in the London market increased. Sudden market stress and disruptions to sourcing, shipping and delivering physical gold in derivatives contracts raise the question of whether counterparties obliged to deliver physical gold could be at risk of incurring increased margin calls and suffering losses.
Note: Gold is also a great electrical conductor so thats another thing it’s good for
Link: https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2025/html/ecb.fsrbox202505_02~7f616fcd3f.en.html
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