by Adam Hamilton
Gold’s strong gains so far this year have been overwhelmingly fueled by one dominant driver, massive investment buying. After shunning prudent portfolio diversification with gold for years, investors are finally starting to reestablish those essential positions. And since their collective gold holdings were so incredibly low heading into 2016, reflecting hyper-bearish sentiment, gold’s investment buying has only begun.
Nothing is more important for driving prevailing gold price levels than investment demand. This isn’t as intuitive as it sounds, as gold’s global supply-and-demand fundamentals imply otherwise. The best data available on this front comes from the venerable World Gold Council, which publishes outstanding Gold Demand Trends reports quarterly. They offer a valuable fundamental perspective which is unparalleled.