Commodity Online Gold prices have set on fire but the demand for gold coins seem to have emerged stronger than ever with global investors going on the buying spree last year. As per the available statistics, investors bought 228.5 tonnes of gold in the form bullion coins, up by over 195% since 2000, when the investors bought 77.4 tonnes of gold coins.
A London-based precious metals consultancy, GFMS has revealed that investors' preference for gold coins has emerged stronger than ever even when the prices have been shooting up. Similarly, exchange-traded funds (ETFs) have also been high in demand especially for the retail investors.
The consultancy firm maintained that holdings in physically backed gold exchange traded funds have been at record highs after some ETFs witnessed some of the historic biggest inflows in over a year's time. The largest gold ETF the SPDR Gold Trust (GLD) recorded its highest daily inflow since early 2009 last week with total holdings hitting a record 1,185.78 tonnes.
Since the beginning of 2009, Gold prices have appreciated by 40% hinting at a correction in recent times. In a May issue of Gold View, Dian L Chu had reported that a dip in gold prices within the next 10 to 20 months is certainly possible as European and U.S. markets stabilize.
'For now, the general trend over short term basis is still to the upside. But at this juncture, gold looks over-priced from a risk/reward standpoint. Retail/individual investors looking to invest in gold are best to stay on the sideline until a significant pullback, possibly at round $1,130,' she wrote.
In the latest first quarter 2010 report on demand and consumption of gold in the world, the World Gold Council revealed that 'net retail investment demand, which covers retail bar and coin demand, was 26% up on the first quarter of 2009 at 182.5 tonnes.'
Secondly, the demand for gold as an investment medium will be driven be the demand from the key investing countries like China, who are aggressively promoting gold investments.