The World Gold Council released its quarterly report on gold demand today, highlighting the record-high investment in the precious-metal by central banks as well as increased demand for jewelry in India, up 41% over last year.
Interestingly, investment demand seems to have stalled, falling 8% over last year, even as prices trended generally higher during the period of the report. It seems that individual investors are shying away from the precious metal while central banks are shoring up their reserves and maintaining high levels of demand.
Will the bubble burst? It’s possible, but with huge economies around the world now more exposed to gold than ever, it seems that their macro-economic policies should tend to prop up its value.
Now might actually be a great time to buy gold if you were to speculate that it bears an increasing importance on a multi-currency reserve system, as individual investors are creating downward pressure on prices while the major investors (central banks) look to acquire even more of it.