1. The Strategic Case for Gold Amsterdam 11 October 2009

2. Disclaimer
The information and opinions contained in this presentation have been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. This presentation does not purport to make any recommendation or provide investment advice to the effect that any gold related transaction is appropriate for all investment objectives, financial situations or particular needs. Prior to making any investment decisions investors should seek advice from their advisers on whether any part of this presentation is appropriate to their specific circumstances. This presentation is not, and should not be construed as, an offer or solicitation to buy or sell gold or any gold related products. Expressions of opinion are those of the World Gold Council only and are subject to change without notice.

3. Introducing World Gold Council
Funded by the world’s leading gold mining companies
We promote the use of gold in all its forms through marketing activities in major international markets.
Offices in key consuming countries:
India
China
Middle East
United States
MEMBERS
Agnico Eagle
AngloGold Ashanti
Barrick Gold Corporation
Coeur d’Alene Mines Corporation
Compania de Minas Buenaventura
Eldorado Gold
Goldcorp
Gold Fields Limited
Harmony
IAM Gold
Kinross Gold Corporation
Newmont Mining Corporation
Peter Hambro Mining
Yamana Gold
ASSOCIATES
Cedimin
China National Gold Corporation
The Hutti Gold Mines Company
Kahama Mining
Minera Yanacocha S.R.L.
Mitsubishi Materials Corporation
Royal Gold Inc.

4. Outline
Demand and supply fundamentals – resilient demand and constrained supply
The outlook
Key investment attributes
A hedge against inflation
A hedge against dollar movements
A safe haven and insurance policy
A diversifier

5. Demand and Supply Fundamentals

6. Q2 tonnage down 9% on Q2 2008

7. Price volatility a constraint on jewellery demand

8. China the lone positive jewellery story

9. A breakdown of investment demand
Tonnes, Q2’08
Tonnes, Q2’09
% change
Identifiable investment
151.9
222.4 46
Net retail investment
147.9
165.7 12
ETFs and similar
4.0
56.7
1315
“Inferred investment”
10.2
195.1
1657
“Total” investment
162.1
417.4
157
Source: GFMS

10. European flows remain very buoyant

11. ETF flows generally long term in nature

12. Share of identifiable demand
Source: GFMS

13. Total Q2 supply down 23% on Q1 2009

14. Net central bank sales have continued to reduce

15. The Strategic Investment Case for Gold

16. Why gold? A safe haven and form of insurance
A simple asset
No default risk
No counterparty risk
Liquid
Gold’s history
As a means of exchange
As the centre of the global monetary system

17. Gold is a hedge against inflation uncertainty
Inflation or deflation?
Gold is a long run hedge against inflation
Yet, a period of deflation suggests ongoing economic uncertainty, so safe haven flows would remain underpinned
Medium to longer term, inflation is a significant risk

18. Gold is a long run hedge against the US dollar

19. Correlations, weekly returns 3 years ending June 2009
Gold is a diversifier
Correlations, weekly returns 3 years ending June 2009
Gold
1.00
FTSE 100
-0.22
DAX 30
-0.20
S&P500
-0.10
MSCI World Ex UK
-0.28
LB /BarCap Global Treasuries Index , TR, GBP
0.02
LB/BarCap Global Treasuries Index, TR, Euro
-0.01
Euribor, 3 month
0.01
UK Lending Rate, 3 month
0.03
Red text denotes that correlation coefficient is not significantly different from zero.
Violet text denotes that correlation coefficient is negative (5% level of significance).
Data: Global Insight, Lehman Bros., WGC

20. Gold is not particularly volatile
Average 22 Day Volatility,
1 August 2007 – 31 October 2009(%)
Oil
50.1
Silver
41.2
Palladium
36.1
GSCI Index
32.8
Nikkei
31.7
Platinum
31.2
FTSE
27.4
Gold
23.8
Dow Jones Euro Stoxx Index
20.3

21. where does gold fit into a portfolio?

22. Results with gold added

23. Over and above a commodity basket
Optimal Portfolios Composition Map
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
4.3%
4.6%
4.9%
5.4%
6.0%
6.7%
7.3%
8.0%
8.8%
9.6%
10.5%
11.4%
volatility
allocation
UK Gilts Short
UK Gilts Medium
UK Gilts Long
Global Bonds
UK Equities
Europe Ex UK Equities
North American Equities
Pacific Equities
Gold
Commodities

24. Summary
The demand for gold has shown considerable resilience across the economic cycle
The three sectors provide a source of balance
The outlook for supply remains constrained
High levels of uncertainty – economic, inflation, currency – are supportive for gold
Gold’s biggest strength is its diversification properties - the focus on diversification and risk management are expected to continue

25. Questions?