Wow, Nobody Wants To Buy - US Investors Exit As Gold Prices Surge

Central banks are buying gold while investors are selling it in an example of how geopolitical shifts are affecting commodities

(March 21, 2024 - Gabriel Friedman)

Two decades ago, rising gold prices launched a historic bull run in Canada’s gold mining sector. Now, bullion is popping to all-time highs again, but this time investors are fleeing gold miners’ stocks in droves.

Even gold exchange-traded funds, which use investors’ money to acquire physical stockpiles of bullion, are contracting as gold prices rise, which is precisely the opposite of what many analysts expected.

The disconnect ties into a broader trend in which the profile of the largest buyer of gold has shifted: investors are fleeing the gold industry, dumping gold mining stocks and redeeming gold ETFs, while central banks around the world, particularly in China, have dramatically increased annual bullion purchases during the past two years.

The result is that the price of gold is shattering record after record, currently trading at US$2,150 per ounce and up 32 per cent since November 2022, but gold mining stocks are being crushed.