Gold Investment Falls, But ETF Growth "Strong"

THIRD QUARTER Gold Investment in bars and coins was down 30% on the same period in 2011, which saw record levels of gold buying, although ETF demand had its strongest quarter in over two years, figures published Thursday by the World Gold Council show.

The drop in Gold Investment via bars and coins made "the most significant contribution to the [year-on-year] fall in gold demand", the latest Gold Demand Trends report says.

"The most recent quarter was characterized by subdued activity across the asset spectrum for much of the period," the report adds, noting that "a combination of summer doldrums and...uncertainty among investors" discouraged some from investing in gold.

"[But this] was partially offset by improvements in the ETFs," the report continues.

"The divergence in the different segments of the investment market serves to highlight contrasting behavior among different sets of investors."

After moving sideways for several weeks, the Gold Price began to rise in August.

"ETF investors responded positively to the prospect of additional monetary policy stimulus in a number of countries," the report explains.

By contrast, "bar and coin investors instead showed a degree of hesitancy and an inclination to take profits at higher price levels."

The Gold Investor Index meantime, which tracks buying and selling on BullionVault, turned higher towards the end of Q3, suggesting individual self-direct gold investors became more bullish than in they had been in the early part of the quarter.

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