The Royal Mint’s responsibly sourced physical gold ETC is now backed by more than half of its physical gold from 100% recycled sources.
HanEtf’s head of research, Tom Bailey, recently shared insights into the company’s innovative approach to incorporating recycled gold into exchange-traded products (ETCs), which it plans to launch in 2022.
“This is a first for Gold ETC,” Bailey told Proactive. “The news is that the recycling rate for the gold backing, ETC, has exceeded 50%. In terms of the percentage of gold certified as coming from 100% recycled sources, this is very impressive for this product. This is an exciting milestone.”
The introduction of recycled gold, which is made in part from e-waste and bullion coin surplus waste, coincides with the growing demand among investors for sustainable, environmentally friendly and responsible investment options. .
HanEtf’s initiative addresses concerns about the energy-intensive nature of gold mining, which has historically been a deterrent for ESG-conscious investors.
According to him, recycled gold has around 90% less CO2 emissions than mined gold, so the carbon footprint associated with gold backing is significantly reduced, without sacrificing sustainability principles. This means that ETC offers a unique option for people who want to diversify their portfolios without having to do so.
“Since the introduction of recycled gold, we have experienced a very significant increase in our AUM balances. Investors believe that this element of recycled back aspect encourages investors to allocate to our Gold ETC over other options. I found that to be an important driver of decision-making,” Bailey said.
Gold’s role as a non-correlated asset, one that does not move in lockstep with equities and a safe haven during times of economic uncertainty and geopolitical risk, increases its value in a diversified portfolio. I’ll raise it further.
Mr. Bailey also highlighted gold’s historical performance during periods of inflation and its appeal as a hedge against market volatility.
The recent rally in gold prices, reaching and sustaining levels above $2,000 per ounce, highlights its relevance and potential for investors.
Gold reached an all-time high late last year, and prices have performed relatively well since then, Bailey noted.
“I think a lot of that is reflecting geopolitical risk into the price, and obviously with the potential for rate cuts on the horizon, gold becomes more attractive as potential returns from bonds decline. There are two possible factors.”
“And the outlook for gold depends on where the Fed goes next and, by extension, where the US economy goes.
“But there could be a rate cut this year, which could be positive for gold,” he said.
