“China and India are the largest consumers of physical gold accounting for more than 55% of jewelry demand and 40% bar and coin demand,” Shah said. “While in many developed markets gold is bought when fear and uncertainty increase, in China and India rising prosperity drives demand for the metal higher.”
Year-to-date, the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and the ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have increased 18.3%.
Additionally, investors may turn to other precious metals, like palladium, which may strengthen on increased industrial demand in a steadily improving global economy.
“Palladium’s performance has lagged gold’s performance by quite some margin this year,” Shah added. “However, with improving industrial demand and tightening emission standards, palladium is likely to benefit from a cyclical upswing.”
The ETFS Physical Palladium Shares (NYSEArca: PALL) has dipped 2.8% year-to-date but rose 15.8% in the past three months.