When investors consider a product such as GLD, they should evaluate the various demand factors that influence gold prices.
“Clearly, investor demand for gold has been strong, as illustrated by the flow of funds into gold-linked investment products, but physical demand from the jewelry sector—highly dependent on demand in India and China—has been less stellar,” said S&P Dow Jones. “According to the World Gold Council, global jewelry demand was close to flat year-over-year in 2018. On a more positive note, an uptick in central bank gold buying for strategic reserves bodes well for the overall strength of demand. Central banks purchased 74% more gold in 2018 than 2017, for the second-highest annual total on record.”
GLD’s 2019 inflows are over $1.50 billion as of the end January.
For more information on the gold markets, visit our gold category.