China's gold demand dips
There have been a number of bearish factors for Gold recently:
- recent trade optimism
- global equity rally
- negative yielding debt the least since June
- India's gold imports falling
- PBOC keeping holdings unchanged last month
- Hedge fund cut net long bets for first time in 3 weeks
You can see on the chart below the drop in total known ETF holdings and the dip in Gold prices recently
There is also a drop in demand from China as imports from China, the world's biggest buyer, falls to a 2016 October low.
January is traditionally an excellent month for Gold as purchases are made ahead of the lunar New Year.
Although research from the World Gold Council suggested that only 12% of those in the 18-22 intended to buy physical gold, the large middle classes in China should prop Gold up in January. Check out Justin's reminder of Gold's pick up in January here.
The bottom line is that if the environment continues to improve for the global economy then gold may have further to pull back before finding demand ahead of the Lunar New year.
