CHART OF THE DAY: How The Old Gold Bugs Lost Control Of Gold

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Latest data from the World Gold Council shows just how much the gold market has changed in just under two years.

Essentially, the more traditional sources of demand for gold, ie. jewelry, industry, gold bar hoarders, and coins have been falling.

Meanwhile, gold demand from new retail investment products has skyrocketed from just 7% of total gold demand in 2007 to a whopping 27% most recently. That’s almost a 4x increase in their share of demand in under two years. Given that market prices are generally driven by incremental changes in supply and demand, clearly the new retail style gold players are now driving the market. 

The true gold bugs of yesteryear are no longer in charge. Though they’re probably not complaining given that retail demand is making them rich. Just realise that retail demand can be a fickle friend.

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