Fueling Gold Price 2016 Upleg

Gold certainly had a rough year in 2015, grinding inexorably lower on Fed-rate-hike fears and investor abandonment.  But gold is poised to rebound dramatically in this new year, mean reverting out of its recent deep secular lows.  The drivers of gold’s weakness have soared to such extremes that they have to reverse hard.  The resulting heavy buying from dominant groups of traders will fuel gold’s mighty 2016 upleg. Investment demand, or lack thereof, is what overwhelmingly drives the gold price.  Investment certainly isn’t the largest component of gold demand, a crown held by jewelry at roughly 4/7ths of the total.  But that is somewhat misleading, as gold’s investment merits are the primary reason Asians flock to gold jewelry.  But since global jewelry demand is fairly consistent, it’s not what drives the gold price on the margin.

First published here: Fueling Gold Price 2016 Upleg