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What is the World Gold Council?

15 Dec 2018 - General Information

The World Gold Council (WGC) was registered in 1987 as a non-profit organization to help increase the demand and application of gold and development of certain gold products in the global market. It has 19 of the biggest gold mining companies in the world as its paying members, and this makes the WGC a membership-based company for the promotion of gold in certain markets like jewelry, the investment sector and also the financial sector (gold coins, etc.).

The World Gold Council first launched with an office in Switzerland and later decided to expand its outreach and scope by opening different offices in New York, Mumbai, Beijing, Singapore, Shanghai, and Tokyo. Currently the World Gold Council's headquarters are located in City of London.

Membership and funding:

Being a membership-based non-profit organization, the WGC is supposed to be fully funded by the yearly membership fee paid by its current members. However, it has developed various other income streams like new products and campaigns to decrease its dependence on its members. It has also launched the popular SPDR gold trust to facilitate investments.

By launching and co-launching many gold-based products and eventually earning a lot of capital from these plus the sponsorship fees it was already earning, WGC finally decided to end its membership fee program and replace it with the council's profits. The council cut the majority of the fee in 2014 and then completed eliminated it the following year.

What are its duties?

The basic reason behind the formation of the World Gold Council was to increase the trend and desire of owning physical gold through different means. A part of WGC's duty is to analyze the gold market and make continuous yet effective and fact-based reports. It publishes The Gold Demand Trends Series quarterly to help the investors speculate the market.

The World Gold Council also explores new potential gold markets. It provides various workshops on effective Gold Reserves Management to the staff members of some central banks.

The management structure:

WGC has pronged into various financial capitals around the world to increase its physical presence and impact on the international gold market. It has a complex management structure with quite a few staff members that run its day to day operations.

Because its primary goal is to increase the market demand for gold, WGC has a Public Policy Team that continuously regulates the gold jewelry market and promotes its use in the technology sector. SPDR gold trust makes gold investments easier.

World gold council has a vast number of employees and owns all of its subsidiaries. It has established representative offices in many countries. It is registered in Geneva, Switzerland and has registered itself as an offshore company in the UK. A board of directors comprising senior members of its partners runs WGC. The head is elected in a biannual vote. The board holds meetings 4 times a year.

Product development process:

The biggest and most valuable product of the WGC is, of course, the SPDR gold trust which it launched in 2004 in partnership with the SSGA (State Street Global Advisors). WGC works as a sponsor of the SPDR with SSGA working as its marketing agent. Initially, it was named as the Street Tracks Gold Trust until 2008 when it changed to SPDR.

Here are some facts about the SPDR Gold Trust:

  • The trust was included in various stock exchanges around the world like the NY stock exchange, Hong Kong stock exchange and some others.
  • Exactly half of the Metals Focus Data Ltd is owned by SPDR; the company provides crucial analytical data to WGC to help in its publications.
  • SPDR also holds an approximately 11% of the London based “BullionVault" company which is de-facto managed by the World Gold Council.

With market trends now constantly changing, it is highly unlikely that the World Gold Council will be able to prove its worth and true potential in the near future. Also many of its members including the Newcrest Mining, AngloGold Ashanti and Goldfields departed in the recent years, which makes the council's job tougher to maintain its standard and perform its role effectively.

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