In contrast, The World Gold Council reported that gold purchases in 2012 were the highest over the past 50 years. A bet against gold prices is not advised, as central bank demand is still strong to diversify reserves. [Reasons Why Gold ETFs Could Bounce Back]
On the flip side, analysts are becoming increasingly bullish toward palladium. The Russian stockpile is depleting quickly and a recovery in the auto industry is creating further demand for the metal. [Gold ETFs Rebound as Prices Test $1600 Per Ounce]
“We expect the palladium/gold price ratio to trend higher at pace over coming quarters and years, and see the scope of palladium to have outperformed gold by at least 30% by late next year,” Jesper Dannesboe and Robin Bhar of Societe Generale said.
Physically-backed gold ETFs:
- SPDR Gold Trust (NYSEArca: GLD)
- iShares COMEX Gold Trust (NYSEArca: IAU)
- ETFS Physical Swiss Gold Shares ETF (NYSEArca: SGOL)
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.