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CNBC Stock Blog
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Gold demand is soaring. George Milling-Stanley, manager of gold market analysis at World Gold Council, offered CNBC some fun facts about the "6,000-year-old hedge" -- and why he wishes he could buy more of it.
Global investment demand for gold in the second quarter: $3.5 billion, up 29 percent from the same quarter in 2007.
Demand breakdown annually:
- Jewelry: 65 percent, or "2/3 to 3/4" of annual consumption.
- Investment: 13 to 14 percent
- Industrial: 12 percent
- (The remainder: Medical & miscellaneous.)
Milling-Stanley says jewelry provides a dependable floor -- while investment demand determines whether prices will rise or fall going forward.
By nation: India accounts for 25 percent of annual demand; the U.S., Egypt and Vietnam follow.
Gold ETF holdings dropped in April; but recovered in May and June.
(Contd.)
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A Contrarian View:
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Price correlations: At the moment, gold is following oil because of the effects on crude of the stronger dollar, Milling-Stanley says. But this is not a mathematical relationship, he says. But the dollar-to-gold connection is "a very, very strong inverse relationship."
As gold is both a commodity and a currency -- and is never totally consumed/used up, unlike most other commodities -- the analyst says it always enjoys offsets, particularly as an alternative to stocks and bonds.
"Gold has been an excellent 6,000-year-old hedge versus inflation and geopolitical tension -- which doesn't seem to be going away. I only wish I could afford to buy more of it," Milling-Stanley said.
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Top gold ETFs:
- SPDR Gold Shares [GLD
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- iShares COMEX Gold Trust [IAU
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- Market Vectors Gold Miners ETF [GDX
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- PowerShares DB Gold [DGL
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Disclosures:
Disclosure information was not available for Milling-Stanley.
Data is a real-time snapshot *Data is delayed at least 15 minutes