Dear investor,

Gold is still struggling. After five years of price declines, we still can’t seem to find a decent bid. This is quite fascinating, and even disturbing. Because, on the back of all the ongoing unrest, one should expect gold to glitter. But it isn’t. It’s hovering around multi-year lows. Why is that?

The answer is fairly simply: a lack of investor demand!

Nothing more, nothing less.

Experts are hamering about the record inflows of gold into China and neighbouring countries, are pointing at record short positions of future markets, are warning about physical shortages, …

But that all doesn’t matter much at this point in time.

There is only one factor that will ring the bell for gold: investor demand!

As investors left the gold arena, price dropped as a consequence. It’s simple economics. Just take a look at the inventory of GLD, the largest gold ETF in the world.

The fact that the gold price took a fierce hit in 2013, crushing the $1.550 support, was mainly a result of physical dumping on behalve of the GLD.

Ever since, the holdings of GLD have been in decline, as did the price of gold. So if one wants to know when gold will take a turn for the better, you just have to monitor GLD inventory.

As a matter of fact, the recent strength of gold (in a broad market sell off) coincided with an uptick in GLD holdings. OK, it was a fairly small jump, but the chart is in a bottoming proces.This could be the start of something bigger in the months ahead.

So if you want to know if the recent price strength for gold is for real, monitor the GLD holdings closely. That’s what we do at Secular Investor on a frequent basis.

It’s not only important for the price development of gold, it’s even more important for the demand of physical gold in the open market. Our special interest lies in the Gold Mining Sector.

As gold demand rises, there will be an excessive demand, which only a few players in the field can succesfully manage. We are screening our gold producers shortlist, as these companies will directly profit from the renewed investor demand for gold.