Telum Talks To... Andrew Naylor, Head of ASEAN and Public Policy, the World Gold Council
Telum caught up with Andrew Naylor, Head of ASEAN and Public Policy at the World Gold Council on how gold is going mainstream and digital during COVID.
The World Gold Council has recently expanded its team in Singapore. Can you share why Singapore was chosen and its role in the gold market?
The World Gold Council has had a significant presence in Singapore for the last 25 years but we recently expanded our investment distribution team in Singapore. Part of our role is to educate investors on the role of gold in a portfolio. Singapore is a huge wealth management hub - about S$3.5 trillion of assets are managed here. The assets are regional, so it makes sense for us to base our regional institutional coverage team in Singapore.
The gold market is truly global. The largest trading centre (by far) is London, and the biggest consumption market is China. However, Singapore plays an important role as a nexus between the London wholesale market and the retail markets of Asia. Many bullion banks have operations here, and Singapore is home to a London Good Delivery refinery.
The COVID-19 crisis has caused major impact on businesses across sectors but how has it affected the gold industry?
Gold has a dual nature - it is both an investment asset and a consumer good. This dual nature means COVID has had a unique impact on the gold market. During times of economic and market risk, institutional investors tend to allocate more to gold and we have seen record investment inflows. However, the lockdowns and general uncertainty has meant consumer demand has dropped - consumers tend to buy less when the economy isn’t doing so well. Taking these together, investment demand tends to offset any weaknesses in consumer demand and that is what we have seen this year.
The World Gold Council strives to make gold mainstream and have the gold industry’s voice heard on the global stage. Have you seen a change in trends on how gold is reported on the mainstream media?
The recent high gold prices and record investment inflows has certainly attracted mainstream media interest in gold and its role in the financial system. It is not just a safe haven - it plays a strategic role in portfolios as a source of returns, a diversifier and as a source of liquidity. Lower yields and a need to protect against economic risk has brought gold back into the spotlight and this has been reflected by recent media coverage.
The organisation works closely within the investment, jewellery and technology sectors, as well as engaging in government affairs. Do you see your team adopting different communication strategies for each sector?
Absolutely. Gold is a unique asset in that the drivers of demand are sectoral and geographically diverse. Each sector and geography has a different audience and requires different channel strategies. Jewellery demand is obviously retail / consumer led and a key audience for us is the millennial audience in large jewellery markets such as India and China. Investment demand tends to be institutional led. The big institutional investment markets for us at the moment are the US, Europe, Japan, Korea, China, Australia and Singapore.
The world has become more transparent and immediate, driven by the digital age. From a comms perspective, do you see this as a challenge or has it brought upon opportunities?
Digitisation has brought us a lot of new opportunities both in terms of how gold is accessed, and how we communicate gold’s proposition. This is especially important in the retail market - digital gold products - where customers can buy, manage, and sell their gold online are taking off. It has also impacted how individuals consume information and this in turn has had a major impact on our comms strategy - our digital presence is hugely important in ensuring that we can reach the right audience, and the next generation of gold consumers.