LONDON and NEW YORK: The World Gold Council (WGC) US has expanded its efforts to educate a variety of audiences about the factors affecting the recent hike in the price of gold and the gold market in general.
As part of the initiative, WGC has extended its relationship with CJP Communications (formerly Cubitt Jacobs & Prosek), which had been working with the WGC's Investment Research and Marketing arm for the past year in efforts to increase awareness among investors and the financial press. Now WGC's AOR, CJP will be working on corporate initiatives, including the promotion of the economic, social, and industrial uses of gold and the precious metal's overall value.
The price of gold reached a record high on March 17, at $1,033.90 per ounce, but has since fallen to about $950. With the US economy edging closer to a recession and the value of the dollar slipping against other currencies, investors have flocked to commodities like gold because of its security.
"One of the things that CJP has been doing and will [continue to do is] help people understand the variety of factors that drive the gold price," said Matthew Graydon, head of external relations for WGC. "Looking at the short-term drivers, [such as] how gold can play a very strategic role in times of financial trouble, the things we're trying to get across are gold as a safe haven, an inflation hedge, and a dollar hedge.
"There are some areas in the gold market that people in the US might not understand," Graydon added.
The WGC is comprised and funded by the gold mining community, with the aim to drive a demand for gold in all its forms. (CJP will not be working with initiatives related to jewelry, which are handled in-house.) Members of this community include Kinross Gold, Newmont Mining, and Royal Gold in the US.
CJP will market the organization's flagship report Gold Demand Trends, which takes an in-depth look at the gold market; communicate messages regarding the industrial uses of gold; engage in investor relation's activity; and organize media roundtables, among other events.
In targeting investors, CJP will conduct outreach to investment media and arrange meetings with investment audiences, such as endowments, pensions, and in-vestment consultants.
Graydon says the price of gold has been rising consistently over the past six years or so, but the organization has received tremendous media attention over the past few months. It's trying to use the media requests as an opportunity to talk about long-term elements, such as supply and demand, that also affect the gold market.
"Whereas many analysts can simply talk about price and prediction on price," Graydon said, "we're very keen to play this education role in helping people understand the factors that drive the price and make gold... an important asset."
WGC also wants to capitalize on the wide variety of uses for gold. The metal has architectural uses, has been used in a range of cosmetic and beauty products, and some research has shown that there are even uses for gold in cancer detection and treatment. But gold's biggest demand comes from the electronics industry, where it is used in numerous devices, such as laptops and mobile phones.
WGC's December 2007 investment in Nanostellar, a developer of emission control technology, will help the PR team tell the story of industrial gold use. The investment enables the marketing and commercialization of Nanostellar's gold-based technologies for reducing pollution caused by automobiles, which would also increase the industrial demand for gold.
Traditionally, this technology uses either palladium or platinum. Like gold, the prices of these two metals have spiked recently, with palladium approaching $600 per ounce and platinum hovering around the $2,000-per-ounce mark earlier in this month.
"We try to take a holistic view," Graydon said. "Investment, jewelry, industrial, and other elements all contribute to the big picture on gold. There's a lot of crossover in the various areas that CJP will be working on. It's important to have an agency that understands the whole gold market."
WGC would not disclose the value of its contract with CJP.