A Familiar Gold Catalyst is Still in Play

“China, the world’s No.1 consumer and producer, accounts for about 29% of the global jewellery demand, and close to 26% of total bars and coins purchases. With its almost 1,843 tonnes, the country also has the fifth largest gold reserves in the world, data from the World Gold Council corresponding to the second quarter of the year shows,” according to Mining.com.

Investors have pulled nearly $563 million from GLD since the start of the fourth quarter.

The good news for gold ETFs is that inflation could serve as a catalyst for the yellow metal. Rising inflation could also prove to be a catalyst for gold ETFs. By some metrics, the Fed has under-estimated U.S. inflation, which could prove beneficial to gold because the yellow metal is historically a popular inflation fighter.

For more information on the gold market, visit our gold category.

Tom Lydon’s clients own shares of GLD.