Which begs the question: What drives this demand?
(Aug 19): The release of three apparently disparate pieces of information last week combine to provide a better picture of China’s position in US President Donald Trump’s ongoing and erratic trade, tariff and currency war with China. Each piece of information offers a new set of opportunities for investors and for adjustment to portfolio settings.
Gold has been on an extended rally for the past few weeks and even some gold bugs are beginning to wonder about the sustainability of this trend. The classic interpretation of this uptrend is that it reflects a shift in risk analysis — a flight to safety in the face of competitive currency adjustments and weakening stock markets. It is primarily seen as a Western-driven process and, to some extent, this is certainly true. Exchange-traded gold funds are the seventh-largest holders of gold after six sovereign nations. Increasingly, the price of gold is supported by these funds buying and selling at the behest of individual investors who hold them.
