Gold price posts strongest annual gain in 14 years despite ETF outflows – Commerzbank

The Gold price closed the last year up 27%. This corresponds to the strongest annual gain since 2010, Commerzbank’s commodity analyst Carsten Fritsch notes.

PBoC buys Gold second month in a row

“The price ended the year at USD 2,625 per troy ounce, which is the highest year-end level since the Gold price was floated more than 50 years ago. It is worth noting that the strong price increase occurred despite the fact that Gold ETFs recorded outflows last year, which amounted to 85 tons according to data from Bloomberg.”

“By comparison, 14 years ago the Gold ETFs tracked by Bloomberg recorded inflows of more than 300 tons. ETF outflows last year were only a third of the outflows in the previous year. Nevertheless, it was the fourth year in a row with outflows. It is obvious that Gold ETFs have become less important for the Gold price trend. Instead, Gold purchases by central banks have become much more influential over the past three years.”

“In contrast to the Gold ETFs, which are published almost on a daily basis, these are only published sporadically and with a long time lag, which in turn makes it much more difficult to explain short-term Gold price movements. Today, the Chinese central bank reported an increase in its Gold reserves by a good 10 tons in December, marking the second month in a row that it has bought Gold.”