The Strategist

JPMorgan Chase: Gold's share in investments hits 11-year high

09/11/2023 - 03:44

Due to central banks actively buying precious metals, investments in gold attained their highest proportion in the total volume of investments made by market participants in 11 years, reads a report by JPMorgan Chase analysts.
According to MarketWatch, analysts arrived at this statistic by dividing the price of gold coins and bars, as well as investments in exchange-traded funds that trade on the physical gold market, by the entire value of financial assets. Bank investments are not included in the analysis.

"The share of investors' funds invested in gold looks quite high by historical standards, and it can be assumed that the structural growth in demand from central banks (caused by fears of sanctions or general diversification and shift away from investments in government bonds of G7 countries) is a positive factor for gold prices," noted Nikolaos Panigirtzoglou, head of the analysts team.

The World Gold Council's second quarter reports also mention the normalization of central banks' gold purchases. A substantial decrease in the central bank of Turkey's purchases of precious metals may be the cause of this phenomena, according to experts at JPMorgan, although it is still too early to draw any conclusions.


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