Gold rush seen with $55m WGC campaign

Sharad Mistry in Mumbai

Faced with extremely depressed demand amidst a sea of gold, the London-based World Gold Council (WGC) is currently in the midst of giving the yellow metal the pristine glory it enjoyed in the yesteryears. Efforts are aimed at helping its promoters, the major goldmine owners. This could see a slew of discrete ‘buy gold’ promotional campaigns in various parts of India, and in various forms, as has been going on since more than the past few weeks in various gold consuming countries like USA, Mexico, Middle East, Egypt, Europe, China, Indonesia and Japan.

Its an Herculean task, because buyers and investors of gold have almost shyed away even when there is too much of the metal available in the gold pipeline. This has resulted in the international price remaining range-bound at $268-272 per troy oz for months on end; the hedge fund managers’ interest in the metal has been on the wane on both the London Bullion Merchants’ Association (LBMA) and the New York’s Comex. The recent jump to $270 from overnight close of $268 was said to be ‘‘too happy a development’’ in recent months.
So, when investment appeal is seen failing to lift gold from the continuous slide, WGC’s gold brand expression and promotional campaigns would concentrate more on warmth, colour, popularity and above all the emotions associated with the yellow metal since centuries. And at the centre of this first-of-its kind exercise is an impressive $55 million promotional kitty that was approved earlier this year. Backed by this and much more, the WGC unveiled a new aura for gold in May, the effects of which are likely to be felt soon in various parts of the country’s bullion business — jewellery-making and buying, in semi-metros as in metros.

The campaign is expected to re-establish gold’s relevance to consumers, provide a rallying point for the gold industry and serve as a focal point for WGC programmes, says a WGC communique. The new campaign will launch this summer in the UK, USA and Italy, with plans to roll out globally over the coming year. The brand variety is expected to be adopted by retailers and jewellers promoting gold and to appear on a variety of other marketing and promotional material, it adds.

WGC’s CEO Haruko Fukuda said “This campaign aims to remind consumers that gold’s intrinsic value extends beyond fashionability, leading it to be revered by almost every culture for its radiance, beauty and spiritual richness”.

Interestingly, WGC has even pushed the gold promotional concepts online through its website www.gold.org. Says one of the pages: Buy Security - Buy Gold...

While institutional investors can avail of guidance from Mr Scott Ram, one of WGC’s advisors, who has an extensive experience in the use of gold as a portfolio diversifier, especially during periods of financial market stress. This will be supported with informative research that clarifies the impact gold can have upon one’s portfolio’s performance during both stress and non-stress periods.

On the other hand, individual investors can call for a complimentary copy of ‘A Guide to Investing in Gold, by sending an e-mail to ....@wgcny.gold.org’.

Or a prospective investor can even ‘Speak to a US independent precious metals dealer or broker.’ What is more, in order to reach the upper crust of the society, WGC has even farmed out its efforts to some of the upmarket financial dailies and periodicals like the Wall Street Journal, Institutional Investor, Forbes and Pensions & Investments. That’s not all, the WGC is also encouraging financial institutions to create investment products that will appeal to investors and enable gold to establish its credibility among competing asset classes. And it intends to reach out to a number of different audiences within both the institutional and high networth groups each with its own special needs and interests. These are:

1) Fund managers and consultants
2) Trustees
3) Independent financial advisers and financial planners
4) Strategic decision-makers and market analysts
5) Media Lastly, it is the London-based Bartle Bogle Hegarty (BBH) which has been entrusted to pull out gold from its current price and demand inertia. BBH’s appointment followed the evolution of a gold branding project being conducted on behalf of the WGC by Wolff Olins (WO) since mid-2000. Mr Brian Boylan, chairman of WO, the branding consultancy and creators of Orange, says: “Few brands come with quite the same wealth of unique qualities as gold, which has been revered for its warmth, beauty and emotional significance”.