KITCO NEWS – Despite gold prices ending the U.S. day session moderately lower Wednesday, the metal is up 27% year to date. Think about that a minute, says Nick Colas, chief market strategist for New York- based Convergex, ‘as we celebrate the S&P 500 making a new high but only +4.5% for 2016 in price terms.’ So who is buying gold here, and why? ‘Consider that U.S. listed exchange-traded funds have been an important buyer of physical gold this year, adding $16 billion to their stockpiles from incremental money flows. Across all types of U.S. listed ETFs, gold funds now have 2.3% of all assets under management,’ says Colas. But he adds that the gold trade is far from crowded. ‘A look at Google Trends for search terms like ‘buy/sell gold,’ ‘gold coin’ and ‘gold ETF’ shows modest upticks in general interest for 2016, but nothing like the levels of 2011 when gold peaked,’ Colas told Kitco News. He adds, ‘As for the ‘whys’ of gold demand, the uncertainty around Brexit has played a role, but so has Chinese demand as the yuan devalues, negative global interest rates, and other macro uncertainties.’ December Comex gold was last down $8.20 an ounce at $1,364.40.
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