Exclusive – Marcus Grubb: “Gold Becoming More and More A Part of The Fabric of The [Global] Financial System”
January 23, 2012 | By Tekoa Da Silva
I had the spectacular opportunity last week to speak with Marcus Grubb, Managing Director of Investment with the World Gold Council. It was an exciting interview to say the least, as the World Gold Council is the world’s preeminent gold organization whose member companies represent nearly 70% of global gold production.
During the interview, Marcus shared his thoughts on the changing global perception of gold by investors, governments, and central banks, efforts by the World Gold Council to catalyze global gold demand and delivery systems, as well as the future of gold in the world’s financial system.
Beginning the discussion with the mandate of the World Gold Council, Marcus said,“The World Gold Council is the market development organization for the world gold industry. It represents the mining producers; something close to 70% of mine production is represented by members of the World Gold Council…We have programs to promote gold demand on a worldwide basis, we produce research on the gold market, and we also invest in developing and creating new channels and new products to make gold more accessible, whether it be in jewelry, investment, technology, and we also speak to and lobby on official use of gold and communicate regularly with the central banks.”
A key role of the World Gold Council continued Marcus, is to “Effectively work with commercial partners to catalyze new channels and products–new access vehicles all around the world. Those access vehicles can either be for professional investors such as ETF’s…but also they can be more in the retail initiatives…the Gold Accumulation Plan in China was signed roughly two years ago, and it was a deal I was involved in catalyzing for the World Gold Council and the ICBC(Industrial and Commercial Bank of China)…we assisted ICBC in launching a gold accumulation scheme in China through their branch network. Basically these are products where an investor can open an account at the branch bank and make a regular deposit of funds into that account through a standing order or direct debit mechanism. Then the bank supplying the program buys gold on a daily cost average basis, so they take that monthly payment and use it to buy gold and accumulate metal in an account for the consumer.”
Regarding the success of the ICBC Gold Accumulation Plan, Marcus commented, “The program in China has now reached something close to two million account holders and a very considerable amount of gold, something over a billion dollars of vaulted gold is now held in the ICBC gold accumulation scheme.”
With respect to the World Gold Council’s efforts on the India Post Program, Marcus said, “The India Post Program…is a program where through the network of India Post we assisted them in launching a physical gold coin, which is effectively endorsed by India Post which is owned by the government of India, and this is sold in a special tamper proof pack, over the counters of the India Post network—which is as you might imagine a vast network across all the twenty plus states of India…That program has also been very successful in making gold more accessible in cities, but also in more rural parts of India as well.”
One of the more fascinating comments Marcus made regarding these gold delivery vehicles is that,“It’s absolutely true that these products could well have applicability in other markets. I can’t say too much more about it, but we are looking at a number of other countries where these kinds of…gold accumulation plans could well be very appropriate products for the needs of consumers in those markets.”
When asked about the perception of gold globally, and it’s future, Marcus replied, “What you’ve seen is a trend recently for gold to become more and more a part of the fabric of the financial system, the most recent developments in that direction were last year with a number of major exchanges and clearinghouses behind major exchanges around the world, publically stating that they would accept gold as a collateral asset in financial transactions…therefore I think it’s pretty clear that the trend is for the importance of gold to be increasingly appreciated by governments and central banks around the world.”
This was yet another outstanding “must-listen” interview on gold, offered by the world’s foremost gold organization. In this editor’s opinion, it is required-listening for all gold investors and investment industry professionals.
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To learn more about Marcus Grubb and the World Gold Council visit: Gold.org
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