Gold is poised to shine the brightest amongst all metals in the Year of the Monkey. After reaching US$1,884 an ounce in late 2011, gold has declined almost every year since, to close at US$1,118 at the end of January 2016. In 2015 there was a universal perception that gold in US dollars would continue its ongoing trend and drop by about 11%, driven in part by a strengthening US dollar and the announced US Fed plan of raising interest rates. Surprisingly, the World Gold Council reported that in China and India, gold in 2015 declined by only 6% and 3% respectively in their local currencies. The demand and trading of gold, as well as the demand impact on price, has now shifted, with more than 90% of physical purchases coming from markets outside the US. The US-centric view of gold has dominated the metal’s global trade focus for many years, as most trades are quoted and settled in US dollars, and this has persisted long after the Bretton Woods regime. In the last months of 2015, gold saw increased downward pressure as the US economy showed a strong recovery. At the same time, there were fears of emerging economies slowing, potentially stifling global growth. Going forward, the US dominance of the gold trade is likely to diminish, as the driving forces on demand and price will be far from its shores, centred not in the US but in the emerging economies of both China and India. Historically, gold does well based on its purchasing power preservation, especially in times of inflation like the 70s and 80s, where spectacular returns on gold investments (some 450% and 720% cumulatively) were available when the Consumer Price Index ran out of control. Consumer price inflation is unlikely to return anytime soon. Still, purchasing power preservation is an essential core tool in an investor’s tool kit. This was well demonstrated by the extraordinary volatility of global equity markets in the first two weeks of January this year, when a flight to the safe haven of gold boosted the price, illustrating its alternative investment ability to preserve value. In addition to investor use as a safe haven, gold demand is underpinned by increasing purchases on behalf of central banks, as well as the growing demand from China and India, the world’s largest gold-buying populations. These features now provide favourable conditions for gold to build momentum for both increased demand and price recovery. The World Gold Council believes 2016 could be the inflection point where the gold market turns. Based on its analysis of the last five cycles, the average time for price recovery is 52 months; it is interesting to note from the gold price peak in September 2011, it is now exactly 52 months! May the Year of the Monkey bring us all luck - with the price of gold recovering strongly and also leading to a recovery of the entire commodities market. (Written by Sandy Chim, President & CEO, Century Global Commodities Corporation)