Gold Demand Dips, But Will ETFs?

The global recession finally appears to have taken its toll on global demand for gold. But has it dropped off enough to hit the metal’s related exchange traded funds (ETFs)?

Recent numbers show that gold demand is down to a six-year low, thanks to the recession. Global consumption is down 8.6% overall from one year earlier. For the first time since 2000, central banks were net buyers of gold bullion, reports Claudia Carpenter for Bloomberg. The banks bought 14 tons more of gold than they sold, the World Gold Council said.

Gold buying by jewelers and electronics makers is lower, too: jewelry demand is off by 22%, and electronics demand is down 26%.

Overall, the touch-and-go economic conditions are impacting jewelry and industrial demand, while investment demand may be in a quiet period, as well. Tthe major gold ETFs are all down about 2% in the last three months.

• SPDR Gold Shares (GLD): down 1.7% in the last three months

• iShares COMEX Gold Trust (IAU): down 1.6% in the last three months

• PowerShares DB Gold (DGL): down 2.1% in the last three months

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