$50 cents club, page-44

We shouldn't underestimate the retail gold market.

India and China are showing their market power in the retail area.

"China and India have typically vied over the title of world’s biggest buyer. But that shifted last year as Chinese consumption of jewelry, bars and coins swelled to record levels. China’s gold jewelry demand rose 10% while India’s fell 6%. Chinese bar and coin investments, meanwhile, surged 28%."

One possible reason for the drop in India's purchases is because of the election which recently concluded. Apparently (I don't know why), their gold purchases drop during the 6 weeks of an election period. I can
t remember my reference for this though...sorry.

The quote above was taken from this article:

https://fortune.com/2024/04/21/gold-price-outlook-record-high-china-demand-consumers-investors-pboc/

Something else that may be of interest from the world Gold Council:
(unfortunately the chart showing the divergence I couldn't bring into the thread but it can be found here: https://www.gold.org/goldhub/research/gold-market-commentary-march-2024)

Chart 3: An unprecedented divergence

Global gold ETF flows and the gold price*

Sources:Bloomberg,World Gold Council; Disclaimer

* Monthly data to 29 March 2024.

ATH in price ≠ ATH in ownership

With gold reaching all-time highs the default assumption for most would be that positioning is likely crowded, as it appeared to be in 2011 for example, but that is not the case.

When assessing gold ETFs as a percentage of total US ETF AUM we found their percentage share is at the fourth lowest level since inception. While past performance does not guarantee future returns, it is worth noting that the last time positioning reached these levels gold embarked on a substantial move higher with considerable support from global gold ETFs (Chart 4).

Similarly, we have found that open interest in the futures market resembles trends that we see across the ETF space; gold’s open interest is well below that of a set of futures across equities, bonds and commodities.³

Despite high prices, we currently view gold to be under owned, and unlike previous rallies this time it does not look as “toppy”.