The Growth of Gold

Sunday, April 24, 2011 10:04 PM Posted by Authors , 0 Comments
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Based on a nice article from seeking alpha. They show the following plot from MorningStar

Recent spurt in gold prices are possibly because of:
  1. The inception and proliferation of gold-backed, exchange-traded funds (ETFs).
  2. Growing retail demand from emerging markets, particularly from China and India.
  3. Central banks switching from being net sellers to net buyers of gold.
  4. Miners scrambling to eliminate their gold hedge books.
The authors believe that most of these factors are non-sustainable over time, which would eventually lead to a drop in gold prices in the future.

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