World Gold Council

The topic that generates by far the greatest disagreement in the investment community, just after whether we will have inflation or deflation, is whether gold is cheap or expensive. And as much as gold is a speculative commodity, it does have roots in fundamental supply and demand. A good source in demystifying the fundamentals in the gold industry, The World Gold Council, has released its summary analysis of investment trends, and market and economic influences in the gold market in Q4 of 2009.

As more and more pundits go for the whole "anchoring" thing and throw around numbers anywhere between $6,300 and -$0.99 per ounce as what the price for an ounce of gold should be, we present some actual data which demonstrates core supply and demand trends in the gold market. The World Gold Council's latest "Gold Demand Trends" quarterly update has been released, with the key message being that while end customer demand is collapsing (gee, the consumer must not be drinking Timmy's Kool-Aid just yet), "the central bank sector presents a positive story, with the underlying trend of improvement expected to remain intact. As with private investors, central banks are looking for diversifiers, and in particular, ways of diversifying their dollar exposure." Nuff said.