“Central banks showed a diminished appetite for gold purchases; China’s purchasing programme was on pause during the quarter as its foreign exchange reserves remained under pressure. Sales, once again, were sparse,” notes the World Gold Council. “Although inflows were just one-third of the extraordinary levels seen in Q1 2016, demand was firm. European-listed products were the most popular, due to continued political uncertainty in the region.”
Indian demand is vital for gold because the country is the second-largest buyer of the yellow metal behind China. India, one of the world’s largest gold consumers, could be set to lower its import tax on bullion, which could be major catalyst for gold prices. Still, emerging market demand for gold has not picked up yet. For instance, China has shown little demand, with the Shanghai Gold Exchange seeing little growth in volume.
“Gold bulls do not want to see this ratio find support at, as this rising support line has rough on metals space for 6-years. If a rally takes place at, it will continue to be hard sledding for metals,” notes ETF Daily News.
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Tom Lydon’s clients own shares of GLD.