Good news for gold enthusiasts: investors have broken the 2009 record for bullion demand. Just like many experts and media have told for months, 2016 has been the best year in many for the precious metal.
This market is bullish right now, enjoying record-high prices that have been pleasant for many who were betting for metal over currency.
The truth is that, for good or bad, the Brexit surprised us. This surprise came with a massive demand for hard assets by worried investors, all of them looking to back up their wealth in a relatively secure way.
According to public data released by the World Gold Council, gold buyers purchased 1064 metric tons in gold bullion during the first six months of the present year.
In comparison with the previous record established during 2009, this first half’s demand enjoy a 16 percent increase. If we look back, 2015 was really sad for this precious metal. Investors didn’t demand even half of this year’s demand back then.
Mr. Alistair Hewitt, head of the market intelligence at WGC, told Bloomberg News that “the increase in investment demand helped make gold one of the best performing assets of the year, comfortably outperforming many equity indices, bonds, commodities and real estate”.
At first, it was a big surprise the great performance of gold. Later, investors and analysts easily spotted the many causes of this event.
Eventually, the US elections were going to have a serious impact on gold prices. This quickly escalated when Donald Trump caused controversy for so many reasons and showed the world that he has a real chance of winning in November.
Then, the Brexit joined the mix by adding political and financial uncertainty to both European and worldwide scenarios.
Even ignoring Middle East’s armed conflicts, the events are pretty dramatic, enough to make people uncomfortable with investing in US Dollars or company stocks.
By the moment, gold ounce reached US$1358.80 during today’s session. The trend is no changing, which means that investors are confident about the precious metal’s bullish market.
The ones who already invested their money in gold are the ones that are really happy with this situation. On the other hand, this trend isn’t making happy to many others.
If you browse for a few minute online, you will quickly notice that Asia is having problems related to the precious metal. Last year, gold prices were on the floor and the investors were deeply disappointed as well by the poor performance of this asset during the Grexit threat.
During those months, both China and India bought hundreds of metric tons of gold. They took big advantage of the low price and used the precious metal to increase their reserves and boost the jewelry industry. Inventories were about to explode.
With the Trump-Brexit combo, prices went up dramatically, reaching new records as we can see in the WGC’s numbers.