Who Is Buying Gold And Why?

Who is buying gold and why is the question posed by The Telegraph today.

“After four years of sharp falls, a sudden revival has been taking place in the gold market.

In the first three months of 2016 the price of the yellow metal soared by 20pc – its best quarterly performance since the financial crisis erupted in the final three months of 2008.

The gold price, currently around $1,260 an ounce, is well below its record peak of almost $1,900 achieved in July 2011, at the height of the European sovereign debt crisis.

For investors who have missed out on the rally so far, the big question is: has gold turned a corner, suggesting that it will continue to rise, or will it crash back down to earth?

As gold pays no income, it is difficult to value. Therefore, unlike an individual share or stock market index, it is less clear whether the metal is cheap or expensive at its current price.

To assess whether gold’s resurgence is here to stay, it is important to look at who has been buying it – and their reasons for doing so.”

The Telegraph points out the merits of having an allocation of 5% to 10% as part of diversified investment or pension portfolios.