Kitco News: Central Banks Put a Floor Under the Gold Price In the Face of Outflows From ETFs

Gold has been a strong player year-to-date. And after a recent pullback, prices are on the move higher again. Investors have several reasons to be attracted to the metal now. Most arguments boil down to the simple logic of supply and demand.

And demand remains strong, even if it’s been shifting. Retail and institutional buyers were bullish a few years back. Today, it’s central banks that are doing the buying.

And that buying is heavy lifting. Central banks tend to buy in tonnes, not ounces. In the most recent quarter, Turkey, India, and China were big buyers of gold. China in particular has been a steady buyer for the past 18 months. That covers gold’s runup over the last year.

Meanwhile, don’t count out retail investors yet. Warehouse retailer Costco (COST) reports that its old out of its first delivery of 100-gram gold bars. Those bars were priced at just under $7,600. They’ll likely sell out just as rapidly in the future.

Gold is best known as an asset that can hold up relative to inflation. While inflation has come down significantly, it still has a ways to go.

With demand looking strong, and supply difficult to change over the short-term, investors may want to buy some more gold or gold-related positions before a potential move higher.

To read the full opportunities in gold right now, click here.